Unsecured lending to consumers fell the most in almost 20 years last month, the Bank of England (BoE) said, reigniting expectations it would authorise further asset purchases next month.
Consumer credit, excluding mortgage borrowing, fell by £377m in December, the biggest monthly drop since records began in 1993, the Bank said on Tuesday.
The drop was due to a fall in borrowing on overdrafts, bank loans and hire-purchase agreements.
Economists said consumers were tightening the purse strings in the tough economic conditions, and predicted a further round of quantitative easing when the Bank's Monetary Policy Committee meets in February.
"The fall in consumer credit reflects individuals' reluctance to take on more debt in a tough economic environment," said Nida Ali, economic adviser to the Ernst & Young ITEM Club.
"[The] figures support our view that the Bank of England is likely to authorise further asset purchases next month."
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