NEW Money and Credit figures released on 2 April by the Bank of England show mortgage borrowing rising, while consumer credit borrowing slowed to £1.4 billion in February, though it was still 8.7 per cent higher than a year earlier.

Debt charity StepChange says that while borrowing is often seen as a sign of rising consumer confidence, it can also be a sign of financial stress as people turn to borrowing to pay for their essential needs.

Research earlier this year showed that one in four mortgage holders had turned to borrowing over the past year to ensure they could pay their mortgage, for example.

Adam Butler, Public Policy Manager at StepChange Debt Charity, said: “Caution is needed in interpreting what levels of borrowing mean. While for some, borrowing may indicate rising confidence, for others it will be an emergency response to being unable to make ends meet. With 22 million people earlier this year saying they expect their finances to get worse over the next twelve months, there’s a real risk that rising borrowing equates to a worsening of the debt situation for some households.

“As we head towards a General Election later this year, we need all political parties to commit to addressing the underlying drivers of problem debt – such as the gap between many people’s incomes, and their ability to cover their basic essential expenditure. In the meantime, anyone worried about their finances or using credit to make ends meet should explore the help available from organisations like StepChange, to help reduce the risk of worsening their position through further borrowing.”

* Read the Bank of England Money and Credit figures here.

* Get free febt advice from StepChange here.

* Source: StepChange