ANNUAL consumer credit growth has fallen to its lowest level in more than two years.

Data from the Bank of England, released on Tuesday, showed that the amount borrowed on loans and credit cards during March 2018 grew by 8.6 per cent, the lowest pace of growth since November 2015.

This is a decline from 9.4 per cent during February and below the peak of 10 per cent reached during the middle of 2017.

Both credit card and loan borrowing dropped during the month.

Annual credit card borrowing grew 8.8 per cent in March, down from 9.5 per cent in February, while the growth in loan advances slowed from 9.4 per cent to 8.4 per cent over the same period.

On a three-month basis, credit card borrowing slowed from 10.8 per cent to 8.8 per cent between February and March, while loan advances plummeted from 8.3 per cent growth to 5.1 per cent.

Despite the slowdown, the seasonally adjusted amount of consumer credit lending outstanding was at its highest level ever at £209.1bn, exceeding the previous quarterly peak of £208.1bn in the third quarter of 2008.

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“A decade on from the financial crisis, we must not lose sight of the impact of sustained pressure on already stretched household budgets in coping with the rising daily cost of living,” Peter Tutton, head of policy at debt charity StepChange, said.

“While the financial system may not be at risk of history repeating itself in terms of systemic failure, at household finances level the risks are all too real.

“Regulators and lenders must act on reviewing credit products like overdrafts, credit cards and high purchase in order to reduce the number of people inadvertently trapped in a vicious cycle persistent problem debt, while the government must support affordable alternatives to affordable credit.”

Read more: Consumer credit demand falls at fastest rate for three years