British households repaid a record amount of unsecured credit in October, chipping away at the £228 billion pound sterling debt mountain built up over a decade of easy lending before the credit crunch.
Bank of England data released today shows credit conditions are still tight despite the central bank's £200 billion quantitative easing programme, with a fall in a key measure of money supply and mortgage approvals staying well below pre-crunch levels.
Outstanding consumer credit contracted by £579m last month, the fourth successive decline. The contraction was almost three times bigger than economists had expected and well over September's £299m net repayment.
A rising household saving rate means the Bank of England expects economic recovery in Britain to be driven by exports rather than the consumer demand that underpinned growth in the years leading up to the credit crunch in mid-2007.
Mortgage lending continued to edge higher after hitting its low-point for the cycle around a year ago. The total number of mortgages approved for house purchase rose to 57,345 from 56,205 - in line with economists' forecasts but barely half the level when house prices peaked in the autumn of 2007.
Net mortgage lending rose £922m in October after an £898m rise in September, again in line with forecasts but just a tenth the sum banks advanced in the boom.
