Consumers continue to pay down unsecured debt

7 January 2010

Figures released by the Bank of England (BoE) have shown that in November, consumers repaid £376m of unsecured debt - £215m less than the total repaid in October, but almost double the six-month average, the Guardian reports.

Meanwhile, the Building Societies Association (BSA) said that its members had seen the value of savings accounts fall by £600m in November - suggesting that some of the money being used to repay unsecured debts is coming from savings accounts.

Chief UK and Eurozone Economist and Managing Director of Western European Forecasting and Analysis at IHS Global Insight, Howard Archer, said: "The fifth successive net repayment in consumer credit in November is clearly the consequence of many consumers` desire to reduce their debt, low demand for credit, and a lack of availability of unsecured credit from banks.

"It is yet another example of consumers looking to improve their financial situations in the current difficult and worrying economic environment."

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