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THE first indication that consumers are tightening their belts emerged today in the shape of figures showing that credit card borrowing slumped last month.

Shoppers spent only 101 million using plastic in June, according to figures from the British Bankers' Association, down sharply from 249 million the previous month and lower than the recent monthly average of 150 million.

"There may be signs in these figures of personal borrowing easing," said BBA chief executive Ian Mullen. "Consumer credit was weaker than in the previous two months and, within that, credit card borrowing was very subdued." Overall consumer credit was 820 million compared with 920 million in May.

Mullen speculated that mortgage borrowing may also have peaked, paving the way for a slowdown in the housing market.

Mortgage lending by the big High Street banks rose by 3.1 billion, almost identical to May's figure.

"We may have reached a (nevertheless high) plateau on that front," Mullen said.

Separate figures from the Building Societies Association suggested demand for home loans is still growing, mortgage borrowing rising for the third month in a row. Advances totalled 2.3 billion, and the same value was earmarked for future release. The consumer has been the bedrock of the economy, shrugging off fears of recession while manufacturing floundered.

The Bank of England, under Sir Edward George, will scrutinise today's figures for clues about whether the economic slowdown is spreading to the High Street.

Most City economists are betting that interest rates will remain at 5.25% for months, but a collapse in consumer sentiment could force the Bank to cut them again.

There was mixed news on Britain's trade position. Government figures showed the global trade in goods deficit narrowed to 2.4 billion in May from 2.8 billion in April.

More up-to-date figures for trade with non-European Union countries showed the shortfall widened to 3.1 billion in June from 2.5 billion in May.

Exporters hit by a global downturn and strong pound drove the deficit in the first quarter to a record. Sterling was half a cent weaker today at $1.4175.

# posted by Medical Information : 4:19 AM