By myfinances.co.uk staff
Applications for personal loans and credit cards remained subdued in December as consumers showed little improvement in their appetite for borrowing, the Bank of England has revealed.
According to its latest Trends in Lending report, finance companies said the number of people looking to take out unsecured loans or new credit cards was below both the monthly average for 2009 and the levels seen in December 2008.
This was attributed to a combination of continuing caution among consumers about taking on extra debt and the poor weather conditions, the Bank noted.
It added that effective interest rates on overdrafts and personal loans declined in the last month of 2009, while the typical credit card rate fell to 17.8 per cent from 18.3 per cent in November, the highest figure since 1999.
By comparison, Moneyfacts said earlier this week that credit card rates currently stand at a 12-year high of 18.8 per cent.
Overall, the Bank said the flow of net consumer credit edged into positive territory in December at around £100 million following five consecutive months of decline.
Nevertheless, the 12-month growth rate for lending remained at the lowest level since 1994 at 0.5 per cent.