Borrowers defy downturn

Credit card borrowing is increasing at its fastest rate for 18 months, confirming that consumers are defying the economic gloom.

Borrowing on the nation's 50m credit cards rose by £329m in November, the biggest monthly increase since May 2000 and more than three times October's £94m rise, the British Bankers' Association said.

"November's figures show little slowdown in personal sector borrowing," the association's chief executive, Ian Mullen, said yesterday. "Mortgage demand appears to be on a plateau, while credit card borrowing in the month was a significant factor in consumer credit growth."

Industry body the Credit Card Research Group has predicted that Britons will spend a record amount using plastic cards this Christmas.

It says that shoppers will use credit and debit cards to spend nearly £20bn this month - more than £7,300 a second.

However, the BBA found that November's rise of £901m in total lending to individuals, excluding mortgages, was close to October's £911m rise.

Other figures issued yesterday showed that mortgage borrowing in November was 27% up on 12 months earlier.

Gross lending fell from £15bn in October to £13.9bn in November, but was well ahead of the £10.9bn lent in November 2000, the Council of Mortgage Lenders said.

The number of loans for house purchase was almost unchanged at 118,000 in November against 119,000 the previous month. The percentage of loans made to first-time buyers increased to 46% from 43% in October.

The average new variable rate on offer fell to 4.52% from 4.87% in October.