The British Bankers Association (BBA) has revealed a surge in consumer confidence is behind rising demand for mortgages and increased credit card spending.
The trade group, which represents the UK’s high-street banks, reported a rise in mortgage approvals for the month of September 2013.
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Latest figures show approvals totalled 43,000, up from 39,000 the previous month and nearly 7,000 and above the past 6-month average.
Further, credit card borrowing figures also managed to overtake repayments.
Commenting on the figures, David Dooks, the Association’s statistics director, said: "September’s figures build on the growing picture of improved consumer confidence, with stronger gross mortgage lending, rising house purchase approvals and increased consumer credit."
Low mortgage rates are thought to have contributed significantly to the rise, but many borrowers are still exercising caution.
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By GlobalDataMark Harris, chief executive of financial services company SPF Private Clients, said: "There remains a strong trend for borrowers to overpay on their mortgages, taking advantage of low interest rates and paying down debt where they can."
"Confidence may be growing in the housing market but homeowners are reluctant to take on more borrowing while there is still uncertainty with regard to the economic and jobs’ climate," he added.
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Consumer confidence continues to rise: Lloyds Bank report
UK mortgage borrowing reached £9.3bn in August: BBA research
