Consumer finance providers have seen an increase in new business for loans and credit cards but car credit has stalled, data from the Finance and Leasing Association (FLA) shows.
New consumer finance business grew 13 per cent annually during August, according to the FLA.
In the eight months to August 2021, new consumer finance business remained 15 per cent higher than in the same period of 2020.
The retail store and online credit sector reported new business up by nine per cent in August compared with same month in 2020, and growth of 11 per cent in the first eight months of 2021.
Read more: P2PFN special report on car finance
The credit card and personal loan sectors together reported new business up by 29 per cent annually during August and growth of 10 per cent in the first eight months of 2021 to £4.3bn.
However, the level of car finance was down five per cent annually in August at £2.5bn.
“Most consumer finance sectors reported growth in August as they continued to recover from the impact of the pandemic on new business levels last year,” Geraldine Kilkelly, director of research at the FLA, said.
“The near-term economic outlook is likely to be weaker than previously expected as rising prices and some increase in the unemployment rate following the end of the furlough scheme weigh on consumer confidence.”