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Consumer credit shows incessant decline as credit borrowing takes a toll with the smallest increase witnessed during the month. As per the official figures of the Bank of England, though mortgages lending did make a comeback with small increase in April, credit card lending was at its weakest for almost four years.
The increase in total net lending (total amount borrowed minus the amount written off as a bad debt or even paid back was considerably lower). With the rise in the value of secured loans and mortgages at £7.3bn in April, overall growth rate plummeted from 11.7% in March to 11.3%.
Having said the above, consumers still owe a secured debt of £ 1,088bn and almost £187bn in unsecured loans and credit cards.
Howard Archer, Chief UK economist with Global Insight comment that credit card figures were "further evidence that consumers are retrenching".
Leading high street retailers like Marks and Spencer’s and Next also indicate that sales have dropped in the recent weeks. Recent surveys and research also reveal that high rates are hitting the consumers and this is lucid from the fact that Bank of England’s monitory policy (MPC) elevated rates for five times between November 2003 and August 2004, with the prevailing rate being 4.75%.
Property Economist at Capital Economics, Ed Stansfield said that approvals were lower than last year with little hopes of substantial recovery from the market.
The housing surveys disclose that price growth have been flat over the past few months with the transaction levels slipping.
95,000 loans for house purchases were approved as against the six-month average of 85,000.
Howard Archer, Chief UK economist said “The Bank of England mortgage lending and approvals data reinforce the impression that a relatively limited seasonal pick up is occurring in housing market activity”
Posted
on : Fri, 03 Jun 2005 00:15 GMT | Credit Cards News
By : Chris Rowe
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