Rates for borrowing will remain well below last year's figures, according to HSBC's May Index.
The index measures enquiries regarding loans, mortgages and equity withdrawals in all UK branches of the bank. It reveals that activity remains around four per cent down on 2004.
However, it also indicates that demand over the last quarter was 2.2 per cent higher than during the three months to February.
According to John Butler, UK economist with HSBC's Economics and Investment team: "While the rate of take up of debt is easing, it remains relatively robust.
"An imminent interest rate cut, as some predict, would run the risk of encouraging households into even greater debt."
Unsecured personal loans are still lower than what it was last year. Equity withdrawals are also softening, with figures for the last three months well down on 2004.
According to Dennis Turner, head of the bank's Business Economics team, this is a part of a wider shift away from equities.
"Within the overall picture there appears to be a shift away from equity withdrawal borrowing to personal loans as individuals become less inclined to borrow against their property, preferring to take on unsecured short term debt," he concluded.
HSBC is one of the largest banking and financial services organisations in the world, with services in 77 countries.
HSBC provides a comprehensive range of financial services including mortgages, savings, investments, loans, online banking and more.
HSBC reports lower borrowing rates
HSBC reports lower borrowing rates
Thu, 02 Jun 2005
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