Bank of England reveals consumer credit drop

The Bank of England (BoE) has revealed the net flow of consumer credit was £0.8bn in September, remaining below the £1.1bn average since July 2018.

The latest credit data shows the extra amount borrowed by UK consumers in order to buy goods and services fell slightly in September, and was below the average since July 2018 for the second month in a row.

The UK’s central bank said that within consumer credit, net credit card borrowing weakened during the month to £0.1bn, the lowest since December 2018. Net borrowing for other loans and advances was £0.7bn, down from £0.8bn in August, and the weakest outturn since March 2019.

Elsewhere, the BoE revealed net mortgage borrowing by households was little changed at £3.8bn in September – close to the average of the past three years.

Net finance raised by UK businesses was relatively strong in September, rising to £9.7bn, which according to the BoE, primarily reflected £6.5bn net issuance of bonds, and £2.9bn of borrowing from banks.

Proposition director at the mortgage network PRIMIS, Vikki Jefferies, commented on the BoE’s latest credit data: “Although September did not see any major leaps or bounds in terms of mortgage lending, market activity remained steady.

“Lenders continue to offer attractive deals and advisers remain on hand to provide clients with the support they’re looking for. As a result, consumer confidence in the mortgage market is still strong – no mean feat considering the wider economic turbulence.

“Over the next few months, advisers have both a duty and an opportunity to help maintain this buyer confidence. By checking in with clients regularly and ensuring they’re on the best product for their needs, brokers will reassure customers that they are in good hands, no matter what next year may have in store.”

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