Personal deposits grow at weakest rate since 2011

People in the UK saved at the slowest rate since 2011 in April, according to new figures from the British Banking Association (BBA).

The amount of personal deposits made into high street bank accounts grew by just 2.7% last month compared to the same period of 2016, which is the lowest annual increase in six years.

The rate of growth equalled a £1.5bn rise in savings, as opposed to the £2.1bn increase registered for April last year.

And with interest rates at historic lows, many of those who do choose to deposit their extra income are also seeing almost no return on their money.

At the same time personal borrowing rates have also risen, driven by a jump in credit card debt.

The BBA statistics show that consumer credit jumped by 6.4% on the year in April, up from 6.1% in March.

With (Other OTC: WWTH - news) price inflation rates beginning to outstrip wage growth households are likely to face an increasing squeeze on their finances in the coming months, but it doesn't seem to have put consumers off the high street just yet.

The increase in credit card use reflects stronger retail spending figures registered for last month, although personal loans and overdrafts have grown at slower rates.

The timing of the Easter holidays this year is said to have bolstered retail sales in April, which grew by 5.6% compared to last year.

Supermarket spending in particular skyrocketed with Britons forking out 10.3% more on groceries that they had the year before.

Eric Leenders, BBA managing director for retail banking, pointed to the warmer weather as another reason for the boost.

"As the spring sunshine picked up in April, so did consumer spending," he said.

"Annual growth in consumer borrowing from the main high street banks grew due to increased customer use of credit cards.

"This was also reflected by an uplift in retail sales volumes, particularly among food retailers over the Easter period."