Debt repayments reach record levels
04/12/2009
Borrowers in the UK repaid a record amount of `consumer credit` (credit card debt, unsecured loans, overdraft debt, etc.) in October, figures from the Bank of England (BoE) have revealed.
Last month, people paid off £579 million more unsecured debt than they borrowed - the biggest contraction in unsecured debt since 1993, when the Bank began keeping records in the way it does today.
It was also only the sixth month in all that time in which unsecured debt repayments were greater than further borrowing.
As the Telegraph points out, the figures will `reinforce suggestions that Britain will be slow to emerge from its worst recession in decades as the cost of repaying multi-billion bank bailouts weighs on businesses and consumers`.
As regards secured debt, further borrowing outstripped repayments by £922 million, slightly greater than the increase we saw in September and above the previous six-month average of £600 million.
There were 57,345 mortgages for house purchase approved, slightly higher than September`s figure, but the number of remortgages approved actually fell.
"The Bank of England`s website provides all kinds of statistics," said a spokesperson for Debt Advisers Direct. "For example, it gives details of how much people have borrowed over the past year. These details reveal that the total amount of outstanding unsecured debt has dropped quite steadily over the past 12 months, falling from almost £234 billion to £228 billion.
"The reasons for this aren`t all positive, but it`s still good to see people`s unsecured debt levels dropping."
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