Credit card spending soars

UK consumers managed to rack up a record ?10.6bn on their credit cards in March - further evidence that the nation's appetite for spending has not yet abated.

Bank of England figures show that, once repayments were taken into account, outstanding debt on credit cards rose by a record ?759m to a total of ?48.83bn. Total unsecured lending, which includes overdrafts and loans, also reached a new high of ?16.79bn during the month.

The figures come just days after the Bank's deputy governor Sir Andrew Large was reported as saying recent data had shown signs of some slackening in the growth rate of consumer spending.

Simon Rubinsohn, chief economist at Gerrard, said: "The overall picture is one in which consumers' appetite for debt isn't actually diminished."

The warm weather seems to have tempted shoppers to spend more, particularly in garden centres where spending was up 1.8% in March from the previous month. Overall retail sales rose by a stronger than expected 0.6% in March, according to the office for national statistics.

Mortgage lending also remained buoyant during March, said the Bank of England, with total advances reaching ?20.8bn - the second highest figure on record.

The Bank said that there was evidence that mortgage lending may slow down from now on, with the number of home loans approved during March falling to 98,000 from 100,000 in February and an average for the previous three months of 106,000. This was the lowest figure since April 2001 when 96,000 new mortgages were approved.

The British Bankers' Association said earlier in the week that remortgaging had soared in March by 53% from the same time last year but that the number of mortgages taken out for house purchase had fallen by 24% in the same period.

John Butler, an economist at HSBC, said: "Both secured and unsecured household borrowing accelerated in March, but new mortgage approvals slowed.

"That contradicts the assertion by some that household borrowing is already slowing, and in fact suggests that the February rate cut may actually have increased households' appetite for debt."