The British Banker's association has said that high street lending figures for June show a net consumer credit, business credit and mortgage lending fall.
The banker's association, which includes two-thirds of mortgage lending and 6o pct of consumer/business lending said that for the fifteenth consecutive month, consumers were repaying banks such as Santander UK (including Alliance & Leicester and Bradford & Bingley deposits), Barclays, Bradford & Bingley lending, HSBC Bank, Lloyds Banking Group, Northern Rock and Royal Bank of Scotland Group.
A net repayment of £314 million in personal loans and overdrafts was seen along with a modest £120 million increase in credit card lending to reach an overall negative lending figure of £194 million.
"Consumer appetite for taking on new borrowing is clearly limited while there is an ongoing desire of many consumers to reduce their debt." said Howard Archer of IHS Global.
"Demand for personal loans fell in June with new lending some 19 % lower than a year ago." added the British Bankers' Association.
Mortgage lending meanwhile, was a four month low at 34,813 new approvals for house purchases whilst net mortgage lending moderated to £2.1 billion in June from £2.5 billion the month before.
"The BBA data showing low and falling mortgage approvals in June reinforce our suspicion that house prices will fall back by 3-5% over the second half of 2010." said Howard of IHS Global Insight.
"The banks' mortgage lending position was little changed in June. The abolition of HIPs and a reported increase in the number of house sellers is expected to encourage activity in the market, though this may be tempered by households' uncertainty over job prospects and the impacts of fiscal tightening." said BBA statistics director, David Dooks.
"Overall lending to business continued to reflect subdued demand, and contraction in lending to most non-financial sectors slowed [by £1.1 billion]."