GROWTH in borrowing by households and private companies accelerated more strongly than expected last month, boosted largely by a further increase in unsecured lending, figures from the Reserve Bank showed.
Private sector credit extension rose by 9.1% compared with the same month last year, well above an August increase of 7.9% and surpassing consensus forecasts of an 8.3% increase.
The figures suggest that consumer demand may be relatively resilient despite the economy’s slowdown, reducing the chances of an interest rate cut in the coming months.
Retail sales figures have proved surprisingly robust in the past few months, providing another indication of the willingness of households to spend.
"We do not expect the Reserve Bank to cut interest rates again this year, although the decision will be highly data dependent," Investec economist Annabel Bishop said on Monday.
"Should evidence emerge of a marked slowdown in growth, particularly the retail sector, then the Bank could ease monetary policy again."
The Bank’s twice-yearly monetary policy forum, to be held on Tuesday, should provide some insight into the Bank’s thinking.
Total household credit grew by 9.1% year on year after a 9% increase in August, the data showed. Growth in corporate credit quickened sharply over the same period, to 9% from 6.8% previously.
Analysts said a key reason for the pickup in household borrowing was a surge in unsecured lending, which grew 18.1% year on year in September, from 14.6% in August.
This trend has fanned concern about the predicament of heavily indebted consumers, although the Bank has said there are no signs of a credit bubble in the financial sector.
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