This is the implication of the latest consumer credit figures from the Finance & Leasing Association, which show that consumers used 8% less credit in the 12 months to June 2010 than in the previous 12 months.
Despite this, FLA members lent £12.5 billion to consumers in Q2 - the equivalent of £200 for everyone in the UK. Demand for credit is lower than last year, but many people are still using credit cards, store cards, instalment credit and loans for everything from furnishings, electronics, home improvements, cars and holidays to smaller everyday items like clothes and eating out.
Fiona Hoyle, FLA head of consumer finance, said: "This month's figures suggest that consumers are uncertain about the economy. It may be that they are waiting to see the impact of public sector expenditure cuts on disposable income before making any long-term repayment commitments on credit.
"The statistics show that the credit market is still weakened. Last month, the Government announced a review of consumer credit and personal insolvency to take place in the autumn.
“This will allow both consumers and lenders to have their say about what regulatory improvements should be made to allow for the smooth operation of the credit market.
“But the Government will need to tread carefully with any subsequent proposals to avoid further weakening an already depressed market."
