Consumer credit growth slowed to a five-year low in May, as shoppers showed more caution over personal borrowing when compared to the same time last year.
New figures released from the Bank of England (BoE) show year-on-year unsecured consumer credit growth rose by 5.6 per cent in May, slowing from 5.9 per cent in the previous month.
The data marks the lowest rate of growth since April 2014, and a slide from a peak of 10.9 per cent in late 2016.
“While consumers have clearly been less affected by Brexit uncertainties than businesses, the overall impression remains that they have become relatively careful in their borrowing amid concerns over the economic outlook while the very low household savings ratio discourages further dissaving,” said Howard Archer, chief economic advisor to the EY ITEM Club.
Weakening retail and car sales also dragged down the growth, he added.
The figures come on the same day as the BoE also released data today showing a steady trend in mortgage approvals, despite a slight dip between April and May.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The number of mortgage approvals for house purchase, which indicate at what level future lending will be, fell back slightly in May but remain broadly in line with the narrow range seen in previous years.”
He added: “It shows that the mortgage market is trundling along quite steadily with no great shocks either way. This is reassuring as there is plenty of political and economic uncertainty, which is preying on people’s minds and creating a delay when it comes to making big decisions.”