Trevor Williams, the chief economist for LloydsTSB Financial Markets, says that although the amount of borrowing is still rising, growth is beginning to slow down.

“People have been reducing their borrowings. If you look at the growth of borrowing through mortgages and of the consumer credit in the UK, it’s been falling,” he said.

“It does look like people are becoming more cautious and reduce the amount they are borrowing, particularly on credit cards. Over last year, credit card borrowing has fallen quite sharply. It does look like people have been expecting high interest rates.”

A recent poll taken by LloydsTSB in May suggested that more and more consumers expected interest rates to rise during the next 12 months.

Two-thirds (66 per cent) of respondents thought rates would go up when asked in May, compared with just 59 per cent of people questioned in April.

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