Newspaper article The Evening Standard (London, England)
Is This the End of the Credit Card Society? FOR THE FIRST TIME IN 11 YEARS CONSUMERS ARE PAYING OFF MORE THAN THEY BORROW
Byline: JANE PADGHAM
BRITONS paid back more on their credit cards than they spent last month for the first time in 11 years, it was revealed today.
Consumers paid off [pounds sterling]40 million more than they borrowed in April - a sign of growing fears about the economy. The figure was revealed as a leading City economist warned that the high street is set for two more years of gloom.
John Butler, chief UK economist at HSBC, said consumer spending will be the weakest since the early Nineties recession as household debt grows, unemployment rises and the property market stagnates.
Today the British Bankers' Association revealed the fall in credit card borrowing - which has fuelled Chancellor Gordon Brown's consumer boom - and said people were now trying to pay off their debts.
The BBA's director of statistics, David Dooks, said: "Consumer credit was noticeably weak, with a rare net monthly repayment of credit card grew only slowly." Household borrowing rose above the [pounds sterling]1 trillion mark last summer, but the slowdown shows more families are struggling with higher borrowing costs.
The Bank of England has raised interest rates five times in the past 18 months, adding about [pounds sterling]70 to monthly payments on a [pounds sterling]100,000 mortgage.
The gloomy outlook for consumers' the housing boom. Figures today from the BBA showed mortgage lending rose by [pounds sterling]4 billion last month, down from [pounds sterling]4. …