The quantity of unsecured credits that were taken by consumers jumped to £732 million this May. According to the Bank of England statistics it was caused by a severe rise in personal loans and overdraughts.
The number of unsecured borrowings almost twice increased in comparison with the £379 million indicator in April. The growth was caused by the loans increase and overdrafts by £603m within a month. At the same time the index of credit card borrowings was just £70m. The increase in unsecured borrowing produced the notice that these loans might be used to cover everyday money expenses.
The inflation continues its growth and it covers a lot of earnings so English people have to think about providing the first necessary things like food, transport and some other costs for the house. That is the reason why people have to be thriftier and take care of their money. But honestly citizens are not ready to cut their consumptions that is why they found an easy way out by borrowing money in a banks. It helps them in making a semblance of a good life like nothing went wrong but it always comes the time when debts should be paid back.
The UK chief economist at IHS Global Insight Howard Archer says the increase was accepted as a surprise and it might be the result of the raising push to the purchasing power of some people.
The level of new loans dropped further in May from a two-year highest peak earlier in 2012.
The amount of mortgage approvals for house purchases was 51,098 in May and made up £7.6 billion. The number of mortgaging approvals went down in May, to 29,244 loans worth £4b – it is the lowest loans’ quantity since February.