New business volumes in the consumer finance sector were down by 2% over the course of last year when compared to 2022.

This is despite business volumes in December seeing 2% month-on-month growth at the end of the year, the latest figures published by the Finance & Leasing Association (FLA) have indicated.

Members of the FLA from the consumer finance sector include banks, credit card providers, store card providers, second charge mortgage lenders, personal loan and instalment credit providers, as well as motor finance providers.

In the association’s latest figures, the credit card and personal loans sectors together reported new business up by 2% in December compared with the same month in 2022, while the retail store and online credit sector reported new business 8% lower over the same period.

“The consumer finance market represented by FLA members reported a modest single digit fall in new business in 2023 compared with 2022,” said director of research and chief economist at the FLA, Geraldine Kilkelly.

“This was reflected across the major finance products of car finance and credit cards and personal loans. The retail store and online credit sector was the only sector to report a higher level of annual new business.

“Consumer confidence has begun to increase as the outlook for their personal finances has improved. Nevertheless, consumer spending is expected to remain subdued this year and our latest forecasts suggest that the UK consumer credit market is likely to see new business grow by around 2% in 2024.”

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