There was a dramatic fall in the amount of money borrowed by the British public in December last year, with non-mortgage borrowing dropping by a staggering £337m.
The Bank of England has said that far fewer overdrafts, hire-purchase agreements and bank loans were taken out at the end of 2011, and is pointing the finger at the volatile current economic situation.
This massive drop is further evidence that the economic problems are reverberating through society and having an effect on people’s daily lives, rather than solely being a matter for the financial powers that be.
Credit card figures remained the same however, suggesting that the tried and tested methods for spending over the Christmas and New Years period are unlikely to go out the window.
IHS global analyst Howard Archer said that "consumer desire to get a tight grip on their finances is clearly the consequence of current heightened concerns over the outlook for the economy and jobs”. The financial risks of borrowing in both smaller and larger economic ventures have been judged too hazardous by many potential investors, causing this rapid decrease.
The doom-mongers appear to have got through to many and a decrease in spending and borrowing has, for the time being at least, become inevitable. There is an eminent dichotomy coming from both the media and the government, with politicians encouraging expenditure as an aid to moving out of recession, but the headlines constantly reiterating the fragility of the current financial climate.
Therefore consumers are placed in an unenviable position, and the ‘tight grip’ Howard Archer refers to and general frugality the figures suggest will be a hard trend to buck.