Annual growth in consumer credit lowest since March 2015

Consumer credit grew by 8.6% annually in March - the lowest figure seen since November 2015, according to the Bank of England’s Money and Credit report.

In February, annual growth in consumer credit had stood at 9.4%.

Within consumer credit, credit card lending increased by 8.8% annually in March, while other types of non-mortgage lending grew at a slower rate of 8.4% annually.

Howard Archer, chief economic adviser at EY Item Club, said: “While March’s slowdown in consumer credit growth was likely influenced significantly by retail sales and other activity being hit by the severe weather, the overall impression is that consumers have recently become more cautious in their borrowing while lenders have become warier about advancing unsecured credit.”

Recent strong growth in consumer credit has prompted concerns that some households could be at risk of over-stretching themselves as interest rates continue to rise.

The Bank of England’s latest Credit Conditions Survey of banks and building societies recently found lenders reined in the availability of non-mortgage credit to households in the first quarter of 2018.

The decrease was “largely driven by a changing appetite to risk”, the report said previously.

The length of interest-free periods for balance transfers on new credit card lending also decreased significantly in the first quarter of this year, that survey found.

The Bank’s new figures also show mortgage approvals for house purchase fell to a three-month low in March.