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Peer2Peer Finance News | September 23, 2019

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Consumer credit growth continues to slow

Consumer credit growth continues to slow
Marc Shoffman

CONSUMER credit growth slowed at the start of the year driven by a fall in the amount borrowed for personal loans, Bank of England data shows.

The January data reveals consumer credit lending grew 9.3 per cent annually in January, sliding from 9.5 per cent at the end of 2017 and remaining below the 10 per cent peak last year.

The amount borrowed for personal loans grew 9.2 per cent, down from 9.8 per cent in December. Quarterly growth also slowed from 9.2 per cent in December to 7.9 per cent in January.

In contrast, there was a growth in credit card use, up 9.6 per cent annually from 8.9 per cent in December. It was up 11.2 per cent quarterly, compared with nine per cent a month before.

The data reflects figures from banking trade body UK Finance earlier this week which revealed consumer credit lending among the high street banks declined for the first time since 2013 in January.

Figures from UK Finance showed the value of consumer credit – incorporating loans, credit cards and overdrafts – fell 0.2 per cent in January.

The environment for small business lending did not fare much better, with figures showing the value of loans to small- and-medium-sized enterprises fell by £0.7bn in January, the largest decline since December 2014.

Read more: Lenders underestimating consumer credit risk, Bank warns

Read more: FCA chief outlines consumer credit concerns