Consumers in Britain appear to be erring on the side of caution, data suggested yesterday, as they plunge record amounts into building societies, take out fewer mortgages, and borrow less against their homes.

Meanwhile the borrowing on credit cards, overdrafts and loans has increased to a five year high, as February saw consumer credit rise, according to the figures released by the Bank of England, to £2.4bn.

February also saw a wave of money flow into the accounts of the BSA (Building Societies Association) members, the biggest inflow since 1997 in fact, with a total of £1.35bn of new receipts coming in. This is clear evidence then that consumers are putting a preference on saving rather than spending.

BSA spokesman Brian Morris offered an explanation for the recent inclination for saving: "Building societies have enjoyed another strong month as high interest rates and attractive products have encouraged people to save with societies. The economic uncertainty and volatility in stock markets have provided further incentives to put money in cash savings."

Mr Morris continued to point out that, compared to last year, lending by societies was down. A notion backed up by the Bank of England figures that show a fall in mortgage approvals for new house purchases, from January to February, and perhaps more notably, a 40% decrease since last February.

The approval of 73,000 mortgages in February was down from 74,000 in January, the Bank said. December's figure of 72,000 was the lowest since mid-1995, whilst February's figure is the second lowest since then.

Vicky Redwood, an economist at Capital Economics, said of the situation: "The latest UK household borrowing figures suggest that mortgage demand has stabilised, but at a low enough level to appear consistent with further house price falls."

A perception that gained agreement from Vince Cable of the Liberal Democrats: "It is becoming clear that the downturn in the housing market is much more than a blip."

"As the credit crunch continues to restrict lending and with many people saddled with masses of personal debt, a dramatic fall in mortgage approvals was inevitable."

There has also been an emergence of further evidence of trouble in the construction sector. The latest monthly sector analysis, from the Chartered Institute of Purchasing and Supply, has shown the first contraction since November 2001.

"The residential and commercial sub-sectors suffered the most as they both contracted at the fastest recorded rates since the survey began," the CIPS commented.

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