The Bank of England (BoE) figures show that annual growth for consumer credit slowed to a five-year low in May.
Consumer credit that incudes overdrafts, credit cards and borrowing was up by 5.6% annually in May, which has slowed from 5.9% in April, this is the lowest rate since April 2014.
Howard Archer, chief economic adviser at EY ITEM Club said, “The overall impression remains that (consumers) have become relatively careful in their borrowing amid concerns over the economic outlook.”
He added, “It should also be borne in mind that consumer credit growth has recently been limited by markedly weaker private car sales, as this has reduced demand for car finance.”
Low mortgage rates are supporting household’s disposable incomes said, Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
BoE’s Money and Credit report said, “Household deposits increased by £6.5bn in May, the largest amount since September 2016.
“This reflects greater flows into non-interest-bearing deposit accounts.”
Mortgage approvals dropped to 65,409 from 66,045 in April, broadly in line with the range seen in previous years.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said the numbers “shows that the mortgage market is trundling along quite steadily with no great shocks either way.
“This is reassuring as there is plenty of political and economic uncertainty, which is preying on people’s minds and creating a delay when it comes to making big decisions.
“Lenders remain keen to lend and several have cut rates in recent weeks, so mortgage rates are likely to remain low for a while yet, further supporting the market.”
Andrew Montlake, director of mortgage broker at Coreco said, “It’s by no means firing on all cylinders but the mortgage market is moving along at a respectable pace.”