Consumers repay 30m pounds debt

Consumers resumed repaying their debts in August, suggesting that deepening economic uncertainty is lengthening recession, writes Peter Torday.

The net repayment amounted to pounds 30m after net borrowings of pounds 78m were recorded in July. The August figure, which coincided with growing uncertainties over the pound's survival in the European exchange rate mechanism and increasing gloom over the economy, may point to even weaker consumer credit figures in September.

Figures from the Central Statistical Office yesterday also showed that consumers and business together repaid a net pounds 225m in August - the largest repayment on record.

In the three months to August, consumers repaid about pounds 7m, down sharply from pounds 109m in the three months to May. Businesses meanwhile borrowed pounds 20m in the three months, down from pounds 77m.

New credit advanced to consumers during August totalled pounds 3.816bn, down from pounds 4.253bn in July but little changed from the pattern of the previous six months. In the latest three months, new credit advanced to consumers increased to pounds 12.225bn from pounds 11.838bn.

Housing starts fell to 12,600 in August compared with 13,300 in the same month of the previous year, according to the Department of the Environment.