Consumer credit rates have increased steadily as the government moved to press banks on the need for increased lending and reduced mortgage rates.

Credit card interest rates and personal loan are yet to fall even after the Bank of England slashed its rates from five per cent to 1.5 per cent since October.  Figures from Moneynet show that over the last past year, the average rate on a personal loan of £5,000 has increased from 10.06 per cent to 11.84 per cent.

Andrew Hagger at Moneynet said: “While the ‘good news’ headlines herald the base rate cuts, the reality for the man on the street, apart for those already on a tracker mortgage, is that average rates on savings, credit cards, loans and overdrafts have all taken a turn for the worse.”

The data also showed that credit card purchase rates were up from 16.77 per cent to 17.48 per cent, while the credit card cash transaction rate has risen from 23.88 per cent to 25.29 per cent.

Statistics also show that the average authorised overdraft interest rate has reached 14.31 per cent up from 13.01 per cent in January 2008.

There will be less unsecured lending from banks according to the Bank of England’s Credit Conditions Survey. The report suggests that in the coming months, lenders will reduce limits on credit cards and tighten lending criteria in general.