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| Version 2 | Version 3 |
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| Consumer borrowing jumps to £732m in May | Consumer borrowing jumps to £732m in May |
| (about 1 month later) | |
| The amount of unsecured credit taken on by consumers leapt to £732m in May, driven by a sharp rise in borrowing through overdrafts and personal loans, according to figures from the Bank of England. | The amount of unsecured credit taken on by consumers leapt to £732m in May, driven by a sharp rise in borrowing through overdrafts and personal loans, according to figures from the Bank of England. |
| The amount of new unsecured borrowing over the month was almost double the £379m borrowed in April and above the previous six-month average of £400,000, and is a return to the figure seen in March. It remains well below the £1.1bn monthly average seen since 1993. | The amount of new unsecured borrowing over the month was almost double the £379m borrowed in April and above the previous six-month average of £400,000, and is a return to the figure seen in March. It remains well below the £1.1bn monthly average seen since 1993. |
| The rise was fuelled by new borrowing on overdrafts and loans, which increased by £603m over the month, while credit card borrowing rose by just £70m. | The rise was fuelled by new borrowing on overdrafts and loans, which increased by £603m over the month, while credit card borrowing rose by just £70m. |
| The increase in unsecured borrowing has prompted warnings that households may be turning to loans to fund everyday spending. | The increase in unsecured borrowing has prompted warnings that households may be turning to loans to fund everyday spending. |
| Joanna Elson, chief executive of the Money Advice Trust, said: "With inflation continuing to outstrip earnings growth it takes more and more of our income to put food on the table, travel to work and power our homes. As a result, people have cut back on their spending significantly. However, some find they can't cut back any more, and are borrowing to bridge the gap." | Joanna Elson, chief executive of the Money Advice Trust, said: "With inflation continuing to outstrip earnings growth it takes more and more of our income to put food on the table, travel to work and power our homes. As a result, people have cut back on their spending significantly. However, some find they can't cut back any more, and are borrowing to bridge the gap." |
| She added: "Borrowing money to pay for essentials is always a risk as there is rarely a sufficient guarantee you'll be able to pay the money back under the terms of the borrowing. It is better to seek independent expert advice to help you budget more effectively, ensure you are getting all the benefits you're entitled to, and make sure you are prioritising your bills and debt payments optimally." | She added: "Borrowing money to pay for essentials is always a risk as there is rarely a sufficient guarantee you'll be able to pay the money back under the terms of the borrowing. It is better to seek independent expert advice to help you budget more effectively, ensure you are getting all the benefits you're entitled to, and make sure you are prioritising your bills and debt payments optimally." |
| Howard Archer, chief UK economist at IHS Global Insight, said the increase was a "surprise" but added: "It may have been affected by some people having to borrow more as a consequence of the extended squeeze on their purchasing power. | Howard Archer, chief UK economist at IHS Global Insight, said the increase was a "surprise" but added: "It may have been affected by some people having to borrow more as a consequence of the extended squeeze on their purchasing power. |
| "Latest data from the Office for National Statistics show that households' real disposable income fell 0.9% quarter-on-quarter in the first quarter of 2012 after a similar drop in the fourth quarter of 2011." | "Latest data from the Office for National Statistics show that households' real disposable income fell 0.9% quarter-on-quarter in the first quarter of 2012 after a similar drop in the fourth quarter of 2011." |
| The Bank of England's figures for mortgage approvals, meanwhile, show that the number of new loans offered dropped off further in May from a two-year high seen earlier in 2012. | The Bank of England's figures for mortgage approvals, meanwhile, show that the number of new loans offered dropped off further in May from a two-year high seen earlier in 2012. |
| There were 51,098 mortgage approvals for house purchase in May worth £7.6bn – the lowest figure since March and significantly down on a 25-month high in January. The drip may be a result of the removal of a stamp duty holiday for first-time buyers on homes between £125,000 and £250,000 which saw those in the property industry report a flurry of activity before the March deadline. | There were 51,098 mortgage approvals for house purchase in May worth £7.6bn – the lowest figure since March and significantly down on a 25-month high in January. The drip may be a result of the removal of a stamp duty holiday for first-time buyers on homes between £125,000 and £250,000 which saw those in the property industry report a flurry of activity before the March deadline. |
| The number of approvals for remortgaging also fell back in May, to 29,244 loans worth £4b – the lowest number of loans since February. | The number of approvals for remortgaging also fell back in May, to 29,244 loans worth £4b – the lowest number of loans since February. |
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