Credit figures point to Xmas gloom

Figures released yesterday showing that shoppers kept a tight hold on credit card spending in November underlined fears that high street traders have had only a moderate Christmas.

New borrowing on credit cards was £6bn last month, 3% lower than in October and 4% higher than a year earlier, according to the British Bankers Association, which represents main lenders.

Strong consumer spending has helped to prop up the economy over the last year, but yesterday's figures supported anecdotal evidence from retailers that spending growth was sluggish over Christmas.

Borrowing on overdrafts and personal loans was also weak in November, the BBA said - with the increase in lending 9% lower than a year earlier, at £2.7bn.

Yesterday's analysis provided some evidence of a slowdown in the housing market, the mainstay of consumer spending. Mortgage lending was strong in November, but stripping out re-mortgaging showed a weaker picture.

Approvals, which point to future demand, fell to 227,500 in November from 243,000 in October. BBA executive director William Mason said: "Looking at new loans approved in November, those for house purchase and equity withdrawal were noticeably weaker than in October, so maybe the tighter housing market and the time of year had some impact on future demand."

Another survey yesterday showed British chief executives less optimistic than counterparts in the US. More than 80% of UK respondents to the survey, conducted by chief executives' group TEC International, expect growth of only 1% to 2% next year, while only 55% of US respondents expect such a weak performance. Only 5% of UK chief executives are planning to increase investment in coming months.

US optimism came despite worries over possible military action in Iraq. These pushed the dollar to fresh three-year lows against the euro yesterday.