PERSONAL borrowing showed little sign of abating last month despite slower growth in mortgage lending, figures from the Bank of England have shown.

The biggest rise in credit card borrowing for three years helped drive total lending to individuals up by one per cent last month, despite a slight fall in the growth of lending secured against the value of customers' homes.

The total figure, which includes both consumer credit and mortgage activity, grew by £8.63bn to £868.06bn.

The figure was slightly lower than the £8.67bn growth in total lending seen in April.

Lending secured against homes grew by one per cent, or £6.89bn, last month compared to a rise of 1.1 per cent, or £7.32bn, the previous month.

But consumer credit picked up sharply from a rise of only 0.8 per cent in April to 1.1 per cent last month, representing growth of £1.73bn to £162.35bn.

Within that, credit card borrowing leapt by £823m to £49.47bn compared to a rise of just £682m in April - the biggest increase since May 2000.

HSBC economist John Butler said the figures show that while the housing market is slowing, consumers remain hungry for debt.

While other data on the state of the economy has been used by some as evidence of the need for a further cut in interest rates, Mr Butler said that the figures highlighted the dangers of such a move.

He said that consumers appeared to be convinced that the current slowdown in wage growth was temporary and that they were continuing to build up debt rather than cutting back.

A further cut in the cost of borrowing would be likely to generate more spending on the high street paid for by cheaper credit, he added.