Borrowers still showered with loan deals

Lenders are still lavishing borrowers with personal loans and credit-card debt, underlining warnings from the Bank of England this week over stretched household finances.

Threadneedle Street’s latest figures for October showed annual growth in consumer borrowing still running close to double-digit levels at 9.6%, only slightly down on August’s peak.

An extra £1.5 billion in unsecured loans were handed out, taking the outstanding stock of consumer debt to £205.3 billion.

The Bank’s financial stability report this week said growth in consumer credit has “slowed a little recently, but remains rapid”, posing a risk to lenders as borrowers are more likely to default on credit cards than mortgages. It warned banks had been underestimating their potential losses in a downturn as a result.

The mortgages market showed further signs of cooling, however, as the number of loans for house purchases fell for the third month running, from 66,111 in September to 64,575 last month, the lowest since September 2016. Remortgages to lock in low interest rates ahead of the Bank’s rate rise this month hit the highest since October 2008.