Credit card lending contracted in April
Credit card lending contracted in April, representing the fourth time it has contracted in the past six months and suggesting that consumer confidence remains low.
Repayments exceeded new borrowing by £118m last month, marking the biggest monthly contraction since August 2006, according to the latest figures from the Bank of England.
Other types of personal lending increased by £400 million in April, a substantial fall from March, when it increased by £500 million.
With the UK in another recession and many people concerned about job security, the figures suggest that people are focusing on reducing their debts, and are unwilling to increase their borrowing.
The Bank of England figures also revealed that mortgage approvals are significantly below their long-term average.
Although the number of mortgage approvals increased by 1.5 per cent from March, to 51,823, this figure is lower than the previous six-month average of 53,000.
The GfK index, which is compiled by a leading market research company, suggests that fears over the economy will cause consumer confidence to worsen this month.
The index, which measures how people feel about the economy and their finances, including whether they are willing to make major purchases, is expected to fall to 33 in May.
This would indicate that consumer confidence at its most fragile since December.
The major consumer concerns include the recession, and the possibility that Greece will leave the euro zone adversely affecting the UK economy.
These fears seem to be overshadowing recent good news on the UK economy, including a fall in inflation to 3% last month, a fall in petrol prices and positive news on employment.
Data from the Office for National Statistics shows that UK unemployment fell by 45,000 to 2.63 million in the first three months of the year.