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| Growth in personal debt is slowing, says BBA | Growth in personal debt is slowing, says BBA |
| (35 minutes later) | |
| The growth in borrowing on loans, credit cards and overdrafts slowed in May, figures from UK banks have shown, following fears of runaway debt levels. | The growth in borrowing on loans, credit cards and overdrafts slowed in May, figures from UK banks have shown, following fears of runaway debt levels. |
| Personal debt grew at an annual pace of 5.1% in May compared with 6.4% a month earlier, the British Bankers' Association (BBA) said. | Personal debt grew at an annual pace of 5.1% in May compared with 6.4% a month earlier, the British Bankers' Association (BBA) said. |
| Borrowing through loans and overdrafts has decelerated in particular since the start of the year. | Borrowing through loans and overdrafts has decelerated in particular since the start of the year. |
| However, individuals are putting little money aside in savings. | However, individuals are putting little money aside in savings. |
| Personal deposits in the major UK banks grew at a rate of 2.6% in the year to the end of May - the slowest annual growth rate in saving since December 2011. | Personal deposits in the major UK banks grew at a rate of 2.6% in the year to the end of May - the slowest annual growth rate in saving since December 2011. |
| There have been fears raised about the growing level of personal debt in the past year, with both the City regulator - the Financial Conduct Authority - and the Bank of England declaring "vigilance" over the issue. | There have been fears raised about the growing level of personal debt in the past year, with both the City regulator - the Financial Conduct Authority - and the Bank of England declaring "vigilance" over the issue. |
| Yet there has been a recent slowdown recorded by the major banks which has been reflected in less spending in the shops. | Yet there has been a recent slowdown recorded by the major banks which has been reflected in less spending in the shops. |
| The annual growth rate in personal loans and overdrafts fell from 6.3% at the end of April to 4.8% by the end of May. | The annual growth rate in personal loans and overdrafts fell from 6.3% at the end of April to 4.8% by the end of May. |
| Eric Leenders, BBA managing director for retail banking said: "This month's figures show that in the run up to the general election, credit growth in personal loans, cards and overdrafts has slowed, which was reflected in lower spending; with increased household costs affecting growth in deposits and saving." | Eric Leenders, BBA managing director for retail banking said: "This month's figures show that in the run up to the general election, credit growth in personal loans, cards and overdrafts has slowed, which was reflected in lower spending; with increased household costs affecting growth in deposits and saving." |
| Housing market | |
| The squeeze on personal finances, owing in part to the rise in the rate of inflation, was also in evidence with a slowdown in mortgage levels, the BBA figures show. | The squeeze on personal finances, owing in part to the rise in the rate of inflation, was also in evidence with a slowdown in mortgage levels, the BBA figures show. |
| The number of mortgages approved for house purchases was 3.3% lower in May this year than the same month a year ago, at 40,347. | The number of mortgages approved for house purchases was 3.3% lower in May this year than the same month a year ago, at 40,347. |
| Estate agent Jeremy Leaf said: "Last May the housing market was still reeling from the imposition of the 3% stamp duty surcharge on second homes so we would have expected approval numbers to have been considerably above where they were this time last year. | |
| "Looking forward, there is no indication that we will see a bigger correction in the property market, just a continuation of what we have seen over the past few months - more cautious trading and more realism among buyers and sellers." | |
| Remortgaging levels also dropped over the same period, with approvals down 10% to 24,248, the BBA figures show. | |
| Where can I afford to live? |