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Borrowing to decline

Consumers are likely to take on less unsecured debt this year, because of higher rates and more rejections by lenders, a new report by independent market analyst Datamonitor has suggested.The UK consumer credit market is predicted to slow for the rest of the year as the effects of the global credit crunch are felt - with personal loan rates rising and lenders tightening their belts.Analyst Maya Imberg said: "Both lenders and consumers will find the consumer credit market tougher as a result of the global credit crunch, as well as the prevailing issue of bad debt. "The US sub-prime mortgage crisis and global credit crunch will affect the market in the short term, with the market dipping in 2007 before seeing a slow recovery." Datamonitor has said that it expects the market to pick up again in 2008, despite the statistic that consumer credit advances were down 1.2 per cent on the first quarter of 2006, and fell three per cent on the corresponding period in 2006.

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