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Last Updated: Monday, 29 March, 2004, 11:29 GMT 12:29 UK
Consumer debt jumps in February
18bn was borrowed through loans, overdrafts and credit cards in February.
Consumers continued to borrow at record levels in February despite recent rises in interest rates, official figures show.

Mortgage lending increased by its largest amount in four months to 25bn according to the Bank of England.

Another 18bn was borrowed through loans, overdrafts and credit cards.

The figures are bound to alarm the Bank's monetary policy committee, which could raise interest rates further to help curb consumer debt.

Lending secured on property increased by 8.97bn in February, more than the 8.47bn rise in January, and up 14.5% on a year earlier.

Some analysts are predicting the monetary policy committee could raise interest rates again in April, as there has so far been little evidence consumers are reacting to higher borrowing costs.

"Consumers seem impervious to the two rate increases we have had so far. With personal borrowing near the top of the Bank of England's agenda, rates are likely to rise again," Philip Shaw, chief economist at investment firm Investec, said.

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