Lending jumps in September, revised Bank of England data show

Error means Bank of England reported unsecured lending in September was significantly less than half actual total

  Photograph: EPA

British customers borrowed more funds on loans and credit cards in September than at any point this year, raising concerns that the financial upturn in the Uk is getting fuelled by debt.

Revised Financial institution of England data on Thursday showed that unsecured client credit rose by £864m in September. This was the highest month to month degree in 2013, and up from an increase of £680m in August.

A Bank of England error meant the figure was reported as £411m earlier this week. “This release was reissued on 31 October 2013 due to an error in implementing a adjust to the reporting population for September 2013,” the Bank mentioned in a statement on Thursday.

The revised figure also implies unsecured lending rose to an annualised rate of five.8pc in the third quarter, a tempo not witnessed given that April 2008.

September’s corrected consumer credit total was also nicely over the 2013 common of £572m, and substantially higher than the 2012 degree of £160m. Consumers took advantage of record reduced loan costs, with the net enhance on loans and other advances climbing to £713m in September.

Net borrowing on credit cards slowed to £151m, representing a five-month minimal.

“It looks that markedly bettering client self-assurance means that people have turn out to be more ready to borrow in latest months,” explained Howard Archer, chief United kingdom economist at IHS Global Insight.

Buyer spending accounts for practically two-thirds of Uk gross domestic item (GDP), and Mr Archer said September’s rise could also be a cause for concern.”It might also be that the squeeze on customer paying coming from inflation operating effectively over earnings growth for an extended time period indicates that some folks are obtaining to borrow a lot more to finance any significant investing.”

Total lending figures were also adjusted, as well as funds supply data for households and organizations. Even so, total M4 data – which is a broad measure of cash provide – remained unchanged. Enterprise lending and mortgage loan information were also unchanged.