Speculation that Britain's debt mountain is about to topple has been contradicted by the release of figures showing that credit card borrowing has fallen for the first time in 12 years.British borrowers owe more than £1 trillion on mortgages, overdrafts, personal loans and other types of debt, and research company Datamonitor recently published a report that branded the British as the spendthrifts of Europe. We now each owe an average of £3,175, compared with £1,558 for other Europeans. But figures released by the Bank of England show that UK credit card customers paid off £311m more than they borrowed last month, the first time there has been a net fall in borrowing since May 1994.
Vicky Redwood, UK economist for analyst Capital Economics, says the fall in credit card borrowing could be the result of two factors. 'Banks are tightening their lending criteria so people can't borrow so easily, but at the same time demand for credit is weakening, possibly because of the rise in interest rates and the slowdown in the housing market.'
