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.”
