Business

Shoppers staying safe on credit, says BBA

Sale sign
Image caption Some stores were offering shoppers cut-price offers in October

Pre-Christmas sales failed to tempt shoppers away from a safety-first approach to paying on credit, the UK's major banks have said.

Retail sales grew in October but there was little demand for loans and overdrafts, the British Bankers' Association (BBA) said.

Credit card borrowing edged up slightly, but mainly as a result of the interest due on existing debts.

There was a slight lift in borrowing on home loans, the BBA figures show.

"The mortgage market, where the high street banks provide around 70% of new lending, remains subdued and demand for unsecured borrowing is slow, reflecting householders' caution in the current economic environment," said David Dooks, BBA statistics director.

Borrowing

The figures show that there was £162m more owed on credit cards than was paid back in October.

Meanwhile, the value of personal savings and deposits in high street banks, including current accounts, rose by £945m to create a total balance of £644.1bn.

With home loans, gross mortgage lending was down slightly on the previous month at £8bn in October.

However, there was a slight rise in the number of mortgages approved in October compared to September, to 76,042. This was 16% higher than in October 2010, when approvals were at very low levels.

"A lack of consistency is the general trend in the mortgage market at the moment," said Suzanne Bradshaw, mortgage broker at Mortgage Arena.

"Following a promising September, lending in October has been flat and with November and December historically slower months, we will be heading into the new year without any real sense of what 2012 might bring."

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