"Uncomfortable" consumer borrowing figures
Published On 2 September 2007
While recent interest rate increases may be beginning to cool the housing market, they have done little to dampen consumer borrowing and spending, a financial website has warned.Recently, the Bank of England revealed that net lending to individuals in the UK in July continued to rise.
Net consumer credit also increased, as did the amount of money consumers borrowed with loans and overdrafts.
David Kuo, head of personal finance at Fool.co.uk, described the figures as "uncomfortable" and said they clearly showed that consumers were still borrowing despite its higher costs.
He added: "Borrowing on credit cards remains stubbornly robust, and demand for personal loans and overdrafts has jumped.
"Borrowers can take active steps now by overpaying their loans today to lessen the effects of higher interest rates.
"Whether the Bank of England increases interest rates as early as next month hangs in the balance. But homeowners can always tip the scales in their favour by paying more than the amount due on their loans."
