Credit card borrowing slows

Based on article from The Telegraph, 3 October 2006

Signs of consumers cutting back on credit card borrowing have been revealed as banks have found that they have had their worst quarter for two years. The current £1200bn household debt looks as though it is taking its toll.

In order to cut their costs, the CBI expects that over 3000 jobs will be cut in the financial sector.

A PwC report showed that a 4% drop in consumer borrowing activity had led to a loss in income for banks which fell for the first time since 2004.

The Bank of England also published a report which showed that credit card borrowing was falling at its fastest rate in two years.

Although credit card borrowing was slowing, the Bank faced a tough decision last week with interest rates - there was still pressure to raise it but the Bank kept rates at 4.75%.