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|Consumer credit continues ‘significant’ growth|
|Wednesday, 31 August 2016|
The Bank of England has today published its latest monthly Money and Credit report, showing consumer credit grew by £1.2 billion in July, down from the previous six-month average of £1.6 billion. The 12-month annual growth rate in consumer credit now stands at 10.1%.
The figures come on the same day as new research from the Money Advice Trust, the charity that runs National Debtline on the use of credit and borrowing by 18 to 24 year olds.
Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: “The rate of growth in consumer credit might have slowed slightly in July, but we still saw a significant increase of £1.2 billion – and industry data shows that the number of credit card purchases grew to 168 million in the same month, despite the result of the EU referendum.
“We remain concerned that while most households will be able to handle this extra borrowing, a minority of households could find themselves exposed to financial difficulty. Many household budgets have never really recovered from the financial crisis – and amid less certain economic times, we need to be prepared for an increase in debt problems in the UK in the years ahead.”
The Money Advice Trust has today published new research showing the high levels of credit use by young people in particular. Its Borrowed Years report found that
· 16 percent of 18 to 24 year olds hold one or more credit cards, owing an average of £856
· 15 percent of 18 to 24 year olds have an overdraft, averaging £1,180 overdrawn
· 32 percent of 18 to 24 year olds feel their debts are a “heavy burden” and only 37 percent of those in debt have a plan in place to repay what they currently owe
(Source: Survey of 2,042 18-24 year olds, commissioned by the Money Advice Trust, conducted online by YouGov in August 2016)
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