Consumers repaid a record level of unsecured debt during October as they continued to focus on improving their finances in the face of the recession, figures showed today. People reduced their outstanding credit card, loan and overdraft debt by £579 million during the month, the biggest contraction in unsecured lending since Bank of England records began in their current format in 1993.
It was also only the sixth time on record that repayments for consumer credit have outstripped new borrowing.
But on the mortgage side, the number of loans approved for house purchase increased for the 11th consecutive month, rising to 57,345, their highest level since March 2008. The contraction in unsecured credit was driven by strong repayments on loans and overdrafts, with outstanding borrowing through these falling by £713 million during October, the ninth time the figure has been negative during the past 10 months. But credit card lending rose by £134 million in October, nearly double the £78 million rise seen during the previous month.
Well its good news that debt is going down and people are able to put money aside for savings and for the ever harder to get “first time buyer mortgages” . As last months figures showed that people are ‘spending’ in the real way…