Credit on the rise as consumer confidence swells

Credit cards are coming out again, as signs of economic growth have encouraged more people to buy now and pay later.

A report by the EY ITEM Club financial services forecast says that consumer credit is on the rise for the first time since the recession, following a four year slump.

Consumer spending has plummeted by 23%, worth around £50bn since 2008, but will improve slightly this year.

Carl Astorri, senior economic adviser to the EY ITEM Club, said: “Net consumer lending is only set to grow by 1.5% this year, but it is very encouraging that it has now finally returned to growth.

“As confidence in the economy improves and the housing market accelerates, consumers are more willing to borrow.”

However, net lending to businesses is not enjoying the same boost, and is expected to have fallen this year, giving rise to worries that the economic recovery is overly dependent on household spending.

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