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September 2, 2009

Mortgage and consumer debt register net falls

by Gill Montia

Story link: Mortgage and consumer debt register net falls

Bank of England figures show the UK’s personal debt burden shrinking in July, for the first time since the Bank began keeping records, in 1993.

The total owed by Britons fell to £1.457 trillion, down £600 million on a month earlier.

Both secured and unsecured lending levels showed falls with the amount outstanding on mortgages down by a net £400 million on a month earlier.

For consumer credit the decline stood at a net £200 million in July, although a £92 million increase in credit card borrowing had to be taken into account.

Mortgage approvals rose during during the month, up 5% on June, to 50,123.

However, total mortgage debt in the UK fell back as homeowners repaid £400 million more than they borrowed.

The decrease is attributed to the continued shortage of mortgage funds and low interest rates, which have encourages some borrowers to increase their monthly repayments.

While Britain’s reputation for personal indebtedness may be on the wane, the figures raise concerns about the future of the economy as the policies adopted to deal with the recession are dependent on the Government and consumers spending with confidence.

 

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