Consumer credit overall dropped 6% in September over the year while the only sector of consumer finance to grow was dealer motor finance, which rose by 2%.
In other parts of the consumer finance market, personal loans were down by 5% and credit and store card spending fell by 8% and 22% respectively. Instalment credit spending fell by 23%.
The FLA’s director general, Stephen Sklaroff, stressed the importance of avoiding further damage to credit markets when he gave evidence recently to MPs as part of the Treasury Committee’s inquiry into financial regulation.
Fiona Hoyle, FLA head of consumer finance, said: “The new figures show that consumers continue to take a cautious approach to spending, with a decline in the amount of credit granted almost across the board. But it’s important to remember that, in absolute terms, FLA members have lent £12.5 billion in the past three months, allowing consumers to make essential purchases.
“We have explained to MPs and to the Government that any new regulation must be well-targeted or it risks entrenching the problem of shrinking markets and not inhibit the contribution of consumer spending to the economic recovery.”
