UK Personal Debt Falls For First Time In 16 Years

Tue, 01 Sep 2009

The UK’s total level of personal debt has fallen for the first time since 1993, when records began, it has been revealed.

According to the Bank of England, personal borrowing fell by £600m in July, reducing the total amount owed by Brits to £1.457 trillion.

"Total net lending to individuals fell by £0.6bn in July, showing a net repayment for the first time in the series," the Bank reported.

It revealed that UK mortgage debt fell by £400m as homeowners repaid more than they borrowed during the month.

There was also a £200m drop in the amount owed on consumer credit, such as loans and hire purchase agreements, once a £92m rise in credit card borrowing was taken into account.

Benjamin Williamson, from the centre for Economics and Business Research (CEBR), commented: "Today's news will not make happy reading for policymakers who have taken significant steps over the last year to encourage greater volumes of lending throughout the economy."

"While today's data are surprising, it is important to remember that this monthly net change is relatively small given the stock of lending in the economy," he added.
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