Britons paid back more on their loans and overdrafts last month and mortgage lending levels remained low.
Consumer credit rates, including those of personal loans, remained largely flat in March, banks confirmed today.
Seasonally-adjusted data from the British Bankers' Association (BBA) shows that the level of unsecured lending through personal loans and bank overdrafts dropped by £200 million over the month. Meanwhile, net credit card lending was up to around £300 million and a slight rise in savings deposits was registered for the month.
Credit lending remains muted among banks as a direct result of the credit crunch, which has led to banks' revenues being tightened and consumers becoming more conservative about borrowing large amounts. However, previous borrowing from consumers has led to a total personal debt mountain of almost £1.5 trillion having been built up in the UK over the years.
The BBA data told a similar story in the mortgage market . Loans for approval dropped by seven per cent from February to March, breaking a three-month run of consecutive gains. Recent surveys from the Council of Mortgage Lenders and the Royal Institution of Chartered Surveyors had suggested that declines in the property market were beginning to alleviate.
BBA statistics director, David Dooks, commented: "Consumer confidence is fragile and unlikely to change demand markedly in the near-term. The banks' figures also show it would be unrealistic to expect the mortgage market to recover in a steady and consistent way in the current economic environment."
The BBA also provided an update on business loans.
"Company demand for increased bank finance is subdued, as large corporates seek alternative funding sources and small businesses operate out of cash-flow during this recession," Mr Dooks confirmed.
