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You can find the current article at its original source at http://www.guardian.co.uk/money/2012/sep/25/consumers-reducing-debts-weak-economic-bba
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| Consumers focus on reducing debts in weak economic environment | Consumers focus on reducing debts in weak economic environment |
| (6 months later) | |
| Consumers are acting "conservatively", repaying loans and shopping around for the savings accounts with the highest interest rates, according to the latest figures from the British Bankers' Association (BBA). | Consumers are acting "conservatively", repaying loans and shopping around for the savings accounts with the highest interest rates, according to the latest figures from the British Bankers' Association (BBA). |
| The data shows that although net mortgage lending grew by 0.6% in the year to August, the outstanding level of unsecured borrowing from the banks contracted by 3.1% over the same period. | The data shows that although net mortgage lending grew by 0.6% in the year to August, the outstanding level of unsecured borrowing from the banks contracted by 3.1% over the same period. |
| Meanwhile, payments into cash Isas were up 5.8% as consumers sought to get the best interest rates on their savings by sheltering them from tax. | Meanwhile, payments into cash Isas were up 5.8% as consumers sought to get the best interest rates on their savings by sheltering them from tax. |
| The BBA's figures showed that the number of mortgages approved for house purchases was down 13% year-on-year, although it had increased from 56,282 in July to 59,631. | The BBA's figures showed that the number of mortgages approved for house purchases was down 13% year-on-year, although it had increased from 56,282 in July to 59,631. |
| This could be an early sign that the government's Funding for Lending scheme, launched at the start of August to boost lending by banks, may be having an impact. | This could be an early sign that the government's Funding for Lending scheme, launched at the start of August to boost lending by banks, may be having an impact. |
| There was also a slight pick-up in activity in the remortgage market, where a lot of the best mortgage deals have been focussed, with 17,558 loans approved compared with 15,895 in July. However, the figure is down by a third on August 2011. | There was also a slight pick-up in activity in the remortgage market, where a lot of the best mortgage deals have been focussed, with 17,558 loans approved compared with 15,895 in July. However, the figure is down by a third on August 2011. |
| New borrowing on credit cards was at £7.1bn, in line with the recent monthly average, but consumer demand for borrowing in the form of personal loans and overdrafts remained weak. | New borrowing on credit cards was at £7.1bn, in line with the recent monthly average, but consumer demand for borrowing in the form of personal loans and overdrafts remained weak. |
| Individuals' outstanding loan amounts are now almost half of what they were at their peak in late-2007/early-2008. | Individuals' outstanding loan amounts are now almost half of what they were at their peak in late-2007/early-2008. |
| The BBA's statistics director, David Dooks said. "People are acting conservatively in this weak economic environment, maintaining debt repayments and building up deposits, particularly in Isas." | The BBA's statistics director, David Dooks said. "People are acting conservatively in this weak economic environment, maintaining debt repayments and building up deposits, particularly in Isas." |
| Martin Stewart, director of independent mortgage broker London Money, said August "was as quiet as a mouse with gloves". | Martin Stewart, director of independent mortgage broker London Money, said August "was as quiet as a mouse with gloves". |
| "The first two weeks of September were also uneventful but in the past week or so things have finally started to pick up," he said. "The Funding for Lending scheme has given lenders more confidence and is driving competition, but that competition is still at lower loan-to-values. The scheme has had no impact whatsoever on house purchase levels and has failed to ignite consumer confidence." | "The first two weeks of September were also uneventful but in the past week or so things have finally started to pick up," he said. "The Funding for Lending scheme has given lenders more confidence and is driving competition, but that competition is still at lower loan-to-values. The scheme has had no impact whatsoever on house purchase levels and has failed to ignite consumer confidence." |
| Howard Archer, chief UK economist at IHS Global Insight, said: "This net mortgage repayment in August reflects both muted housing market activity and high capital repayments." | Howard Archer, chief UK economist at IHS Global Insight, said: "This net mortgage repayment in August reflects both muted housing market activity and high capital repayments." |
| "This supports the view that house owners are looking to take advantage of low mortgage interest rates to reduce their outstanding mortgage levels to improve their balance sheets." | "This supports the view that house owners are looking to take advantage of low mortgage interest rates to reduce their outstanding mortgage levels to improve their balance sheets." |