HSBC reveals soft rise in demand for borrowing

01 July 2005
There has been a soft rise in demand for personal loan, mortgage and equity withdrawals over the past three months, according to HSBC.

The bank's June Index, which measures enquiries about these products in all HSBC branches in a single month, reveals that demand was slightly up on the previous three months, after allowing for seasonal factors and promotional activity.

However, demand remains weaker than a year ago, with equity withdrawal especially weak, HSBC discovered.

"Demand for borrowing has slowed but it is not collapsing. The risk of an early rate cut is that it could cause a re-acceleration," commented John Butler, UK economist with the HSBC Economics & Investment team.

Dennis Turner, head of HSBC's Business Economics team, added: "The cooling of the housing market has meant that borrowing against the value of dwellings to finance current spending has lost its shine, with equity withdrawal demand suffering the biggest drop in demand so far this year."

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