In July, retail store credit was down by 13% and credit cards and personal loans by 2% compared with July 2010. Second-charge mortgages were 8% up on the previous July, but from a very low base.
Fiona Hoyle, head of consumer finance at the Finance & Leasing Association, said: "Consumers are cautious about spending on the High Street. When they do decide to borrow, they focus on essential expenditure like buying a car, carrying out home improvements and debt consolidation.
"In considering a new regulatory regime for consumer credit, the Government needs to be careful to avoid shrinking the market further, for example by applying rules more suited to the deposit markets."
