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Consumer credit grows rapidly in January

Written by: Paloma Kubiak
Credit card and loan debt grew by £1.6bn in January, up 9.1 percent on a year ago, official Bank of England statistics show.

The sharp rise in January compares to the average monthly increase over the previous six months of £1.3bn.

The total amount of outstanding consumer debt, which includes credit cards, other loans and advances, now stands at £179.5bn.

Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline said: “Such rapid growth in consumer credit is something that should be of concern to us all.  This latest spike in January comes on top of what was already a big rise in borrowing in the run up to Christmas – and we remain concerned that a minority are turning to credit to make ends meet.

“More borrowing is of course to be expected in an economy that is on the mend, but we must not underestimate how many household budgets have never really seen a recovery of their own.  A large number of families are only just about getting by, and our message to them is to think very carefully before taking on more credit commitments.”

Mortgage approvals

The statistics also revealed that gross mortgage lending in January was £21.3bn with repayments totaling £17.7bn.

Lending secured on properties leapt by £3.7bn in January, well over the average monthly increase of £3.4bn over the previous six months.

Loan approvals in the first month of 2016 also outpaced the monthly average over the past six months, at 74,581 compared to 70,221. Remortgaging approvals totalled 42,228 compared to a monthly average of 40,306 over the past six months.

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