BLACKBURN, England, July 11, 2012 /PRNewswire/ --
An increase in borrowing resulted in consumers' personal debts rising last month. According to some new figures published by the Bank of England, Britons increased their debt levels sharply in May through loans, overdrafts and credit cards.
The lending to individuals data shows that credit card borrowing has risen by £70 million and new unsecured borrowing outstripped repayments by £732 million during the month. This is higher than £403 million which has been the average over the past six months.
Findings reveal that the number of house mortgages approved fell slightly last month to 51,098 and the Building Societies Association suggests that this is because the Eurozone crisis is affecting homebuyers' confidence.
The statistics come at a time when the Bank of England's Monetary Policy Committee has voted to increase the quantitative easing (QE) programme from £325bn to £375billion. It means that the Government will publish more money in an attempt to revive the economy.
Experts have raised concern that consumers are being forced to borrow money to fund their day to day lives. This is concurred with Credit Action's July Debt Statistics; the national money education charity.
The charity found that that since the start of 2012 there had been a steady downward trend in average household debt (excluding mortgages) however in January it rose for the first time in two years and it shot up again last month.
Michelle Highman, CEO of Credit Action, said: "The trends highlighted by Credit Action's Debt Statistics reflect the fact that households are having a pretty tough time of it at the moment. In particular, the periodic increases in average household debt suggest that people are under pressure and are having to fall back on credit in order to get through the month; clearly a source of concern."
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