John Butler, HSBC’s head of UK economics, noted: “Households still seem willing to enquire about taking on new debt.”

Activity in the last three months of 2004 was slower compared with the summer, but was 0.9 per cent up on a year earlier.

Secured lending fell, but this followed an exceptionally buoyant summer.

This meant mortgage and equity withdrawal demand in the three months to December stayed well above the final quarter of 2003.

“The index continues to emphasise the dichotomy between secured and unsecured borrowing with customers preferring the attractions of secured borrowing over unsecured loans,” said Dennis Turner, head of the bank’s business economics team.

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