Bank figures show drop in mortgage lending

Figures released today by the Bank of England show that consumer borrowing and spending is starting to slow.

15:39 29 September 2004

Figures released today by the Bank of England show that consumer borrowing and spending is starting to slow.

After five interest rate rises in a row, the Bank of England figures show that loans and mortgages are perhaps starting to feel the effects.

Mortgage lending rose at its slowest rate for a year and the number of secured loans for August was 500,000 less than it was in July.

However, credit card spending did increase by one per cent. Analysts suggest that this increase may still cause the Bank of England to raise base rate levels for the sixth time.

The Confederation of British Industry (CBI) has also released figures that state that retail spending has surprisingly fallen. September sales were at their weakest for one and a half years.

Ian McCafferty, chief economic advisor at the CBI, noted: "The Bank of England has been successful in slowing the growth of consumer spending. It must now be careful not to overdo things. Interest rate increases should be put firmly on hold for the time being."