Consumer borrowing growth slows with rising prices hitting spending, says report

Annual growth in consumer borrowing slowed in March in signs that rising prices are biting into people's spending, according to a high street banking report.

The British Bankers' Association (BBA) said consumer credit grew by 6.1% in March, down from a 6.5% annual uplift in February.

The slowdown reflected slower growth in borrowing using personal loans, overdrafts and credit cards, the BBA said.

Some recent reports showing strong growth in consumer credit have prompted warnings from debt help charities that households could be putting themselves at risk of over-stretching themselves financially.

Eric Leenders, BBA managing director for retail banking, said: "In March, annual growth in consumer borrowing from the main high street banks slowed, perhaps mirroring the dip seen in retail sales volumes as price rises appear to have started biting into consumers' spending."

Meanwhile, there were 41,061 mortgage approvals for house purchase in March, marking a 2.8% fall compared with February, but in line with the recent monthly average.

Borrowing by non-financial companies increased by £3.6 billion in March, the BBA said.

Mr Leenders said: "House purchase approvals were largely in line with last year's average, broadly reflecting a steady housing market.

"Business lending increased in March across a number of sectors including construction, manufacturing, retail and wholesale, and utilities."