Tuesday 7th November 2006
The unsecured loan market has slowed, according to Alliance and Leicester, which has just published its new borrowing thermometer.
While borrowing has increased by 1.4 per cent year-on-year, this compares with a ten-year average increase of 11.7 per cent and is below the rate of inflation and wage increases, the bank said.
Chris Rhodes, managing director of Alliance and Leicester retail banking, said: "People are now seeing their unsecured borrowing fall relative to their earnings."
Mr Rhodes remained unconcerned by the fact that the present borrowing climate reflects that of the recession in the early 1990s.
"This time the economy is performing well and employment is at a record high," he added.
Overall unsecured borrowing was £11 billion less than forecasts based on the past decade, with credit card lending expected to fall for the first time this year.
Alliance and Leicester offers personal loans for between £7,500 and £20,000 with a typical APR of 5.9 per cent which it says could save over £1,000 when compared with other leading providers.
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