The Bank of England requested the UK to go spend their money in the retail arena. The UK acted, and decided to pay off debt instead. In doing so, they brought consumer credit down by 120 million pounds in August, according to figures compiled by the Central Bank. This is surprisingly the biggest drop since November of 2009. The data also directly contradicted the forecasted 100 million pound rise.

Andrew Goodwin, senior economic advisor to the Ernst and Young ITEM Club, commented on the cautious approach consumers are taking to today’s economy, saying: "With consumers wary of taking on more credit and household incomes under pressure from the combination of weak earnings growth and high inflation, the outlook for consumer spending looks pretty bleak."

The outlook on the economy has also affected mortgage loan hopefuls, as approvals fell by about 1,000 to 47,372 in August. This data supports the ongoing concern that the housing sector needs help, and fast. Remortgage saw a slight increase in August with over 28,000 homeowners seeking a better deal.

Howard Archer, chief economist at IHS Global Insight, commented on the housing market and what can be expected with house prices in the near future, saying: "Housing market data and survey evidence has been consistently downbeat recently and the very weak Bank of England mortgage lending data for August is a prime example.

"Indeed, the drop in mortgage approvals to a six-month low fuels our suspicion that house prices will fall back by some 10pc over the latter months of 2010 and during 2011."

Unfortunately, the gloomy data continues both for the housing sector and the economy in general. As the government continues with budget cuts and implements VAT measures, the future appears challenging.