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Have consumers really stopped borrowing?

Remember not that long ago everyone was panicking about the ballooning levels of credit card lending across the UK economy.
The same people might soon be panicking about a sudden collapse in credit card lending.For new figures released by the Bank of England today depict a sudden, almost unprecedented dive in the amount we're borrowing on our credit cards and unsecured loans in March.For the past three years, the amount we're adding to our unsecured borrowing (eg how much we're increasing our credit card bills across the economy) has been consistently over a billion pounds a month. In March, that suddenly fell to just €254m.This is the lowest monthly figure since late 2012, when the economy was facing the threat of an imported slump from the euro crisis. And while some, who think we've been borrowing too much in the past, might see it as a positive sign, the sudden nature of the drop is worrying economists.
Have consumers really stopped borrowing?

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What does weak consumer data mean for the economy
And that's because for many decades the consumer has been the engine of the UK economy.When consumers stop spending that means the economy often stops expanding.Indeed that's what seems to have happened in the first quarter of the year, on the basis of last week's GDP figures - another unusually weak print of 0.1%.There is a big proviso. March was, of course, the month of the "beast from the east" - the Siberian snowstorms that shut down many parts of the country.
It is quite probable that at least some of the fall is down to the consequent drop in consumer activity as people stayed home.Then again, it also fits in with a broader picture, of an economy which is starting to lose some momentum.Indeed, not all that long ago investors thought the economy was looking so promising that there was a 100% chance of an increase in interest rates this month.Broadly speaking, stronger growth tends to mean more inflation, which pushes the Monetary Policy Committee to lift the cost of borrowing.Now, the probability has fallen to around 15%.
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The big question now is how the economy evolves in the coming months. Have consumers really stopped borrowing? Have they stopped spending? Has manufacturing activity tailed off? That's one message from the purchasing managers' index, published by IHS Markit today? And is the same true of the services sector?It is too early to say that the economy is now facing a slump. But there are some worrying signs across the board that things are not going as well as had been hoped.
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