1 October 2012
Jittery households spent August paying off personal loans and mortgages amid worries over the economy, the Bank of England said today.
Its lending figures showed a £410 million repayment by consumers, with £276 million lopped of mortgage loans. Experts said the Olympics were also likely to have played a part in a disappointing month for the housing market, with mortgage approvals virtually flat at 47,665.
The Bank launched its £80 billion Funding for Lending scheme in August, which is expected to boost credit later this year. But in August total lending by the banks fell by £5 billion. Lending to businesses dropped by £1.2 billion although the average interest on new loans to firms eased marginally to 2.66%.
