Today’s data from the Bank of England shows a monthly slowdown in the rate of growth in consumer credit lending – but in the first quarter of this year, the seasonally adjusted amount of consumer credit lending outstanding was at its highest level ever at £209,175 million, exceeding the previous quarterly peak of £208,296 million in the third quarter of 2008.
Commenting on the latest data, StepChange Debt Charity head of policy Peter Tutton said: “A decade on from the financial crisis, we must not lose sight of the impact of sustained pressure on already stretched household budgets in coping with the rising daily cost of living. We estimate that severe problem debt currently affects some 3.4 million people in the UK, so tackling and preventing vulnerable households from falling into problem debt should be high on the policymakers’ agenda. While the financial system may not be at risk of history repeating itself in terms of systemic failure, at household finances level the risks are all too real.
“Regulators and lenders must act on reviewing credit products like overdrafts, credit cards and high purchase in order to reduce the number of people inadvertently trapped in a vicious cycle persistent problem debt, while the government must support affordable alternatives to affordable credit.”