The net increase in consumer credit was £492m, after an £862m increase the previous month. The weakness of retail spending in the new year explained the slowdown, analysts said, although many were surprised by its sharpness.
Credit card borrowing rose by only £115m compared with the previous month's record £302m, probably due to the weakness of spending on clothing and footwear, often paid for on plastic.
Borrowing from specialist lenders was £82m, well below the £412m rise in December. This weakness was unexpected since car sales and purchases of household goods, many of which are financed through this sort of credit, were strong.
Total mortgage lending fell from £1.55bn to £1.42bn in January, confirming earlier reports from lenders that the housing market remained stagnant. Halifax reported separately yesterday that house prices edged up by only 0.2 per cent in February, to a level 1.1 per cent lower than a year earlier.
Although the pace of borrowing slowed, the year-on-year growth of consumer credit and total borrowing remained high. Consumer credit growth rose to 11.4 per cent, while the growth of total borrowing was almost unchanged at 6 per cent.
Marian Bell, an economist at the Royal Bank of Scotland, said the expansion of credit was fast enough to be of concern.
Full money figures for January showed overseas investors sold £1.3bn worth of gilts.