Credit demand slows in wake of tax rises

CONSUMER credit and business finance slowed down in April, according to a survey published by the Finance and Leasing Association, writes Diane Coyle.

David Hardisty, chairman, said: 'Business in April was definitely slower than earlier in the year, and we may be seeing the first effects of tax increases on larger items of consumer spending.'

The FLA's members reported an 8 per cent fall in consumer credit in April, to pounds 1.3bn. The year-on-year increase of 31 per cent was the slowest since October. The growth of business finance also slowed - especially leasing, which was 17 per cent down on a year ago at pounds 425m.

A separate report from Infolink, an independent credit information organisation, found credit repayment had improved significantly in the first quarter of the year.