Demand for credit remains flat, study shows

The overall demand for credit has remained broadly flat across Australia in recent months, although uptake of personal loans has risen slightly.

Veda's new credit index showed a 0.5 per cent decline in the second quarter of the year, but this was still a marked improvement on the previous three months, when the barometer fell by 4.4 per cent.

Personal loan applications increased by 1.4 per cent over the first six months of the year. Meanwhile, an extra 4.8 per cent managed to secure a mortgage in the first half of 2012 and Veda representatives believe this may be down to recent cuts to the national cash rate.

The Reserve Bank of Australia slashed interest rates by 75 points in May and June, which followed on from a 0.5 per cent drop in November and December 2011.

However, economists are now split on whether the bank will lower the cash rate any further over the next few months.

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