Non-mortgage borrowing falls again
The Bank of England has revealed a massive fall in consumer borrowing, the largest since 1993 when records began. The amount of unsecured loans fell by £713 million in October compared with September which perfectly illustrates the common perception that UK consumers are looking to pay off as much of their unsecured loan debt as soon as possible.
Even though there was a £134 million increase in credit card borrowing in October, compared to September, the repayment of unsecured loans far outstrips this particular increase. This is the fourth month in a row that UK consumers have repaid more loans than they have taken out although how long this will last will be dictated by the strength or weakness of the UK economy in the short to medium term.
Even though we saw a substantial fall in the value of unsecured loans in October, the total value of outstanding unsecured loans in the UK is still a mind blowing £228 billion. This is the massive debt which was been accumulated by UK consumers during the boom times and a figure which needs to be reduced significantly in the short to medium term to rebalance the UK finances and the spending strength of UK consumers.
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