Consumer borrowing splurge soars to £1.2bn
Consumers embarked on their biggest borrowing spree since before the recession during September, giving the Bank of England's £80bn efforts to revitalise lending a major boost.
Shoppers took on an extra £1.2bn in personal loans and credit card debt during the month, the largest jump for a single month since February 2008, according to the Bank. The borrowing surge came against a backdrop of easing pressure from inflation, which fell to 2.2%, its lowest level for more than three years, last month.
The Bank's surprisingly buoyant lending figures also revealed a £491m jump in mortgage lending during the month, while loans for house purchases also topped the 50,000 mark for the first time since May.
It is the strongest evidence yet that the Bank's Funding for Lending scheme, which allows banks and building societies to access funds at rock-bottom prices in return for growing credit, is finally beginning to gain traction after a slow start. It also comes as a fillip for the Bank's Monetary Policy Committee after a stronger-than-expected 1% bounce for the economy between July and September, partly flattered by a Jubilee-impacted second quarter.
Mortgage approvals also jumped 4% to 50,024.