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Consumer credit at its highest level for nine years

By Vicky Shaw

Concerns that people are becoming increasingly tempted to go into debt to fund their spending have been raised after Bank of England lending figures showed the biggest annual jump in consumer credit seen since 2006.

The Bank's Money and Credit report for September showed annual growth of 8.2% in consumer credit, marking the strongest increase seen since February 2006.

A total of £176.3bn-worth of consumer credit was outstanding in September. Within consumer credit, borrowing on credit cards increased by £288m in September and personal loan and overdraft borrowing increased by £973m.

Howard Archer, chief UK and European economist for IHS Global Insight, said high consumer confidence and continued low interest rates meant people were more prepared to borrow.

But he added: "However, there is the concern that consumers are becoming increasingly tempted to take on debt again."

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