Consumer borrowing slows to lowest rate in five years
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The Bank of England has reported that year-on-year unsecured consumer credit growth slowed further in April to be at the lowest level since June 2014.
This extended the downward trend evident since November 2016. It stood at 5.9 per cent in April, down from 6.4 per cent in March and a peak of 10.9 per cent in November 2016.
Net unsecured consumer credit rose to £942m in April from £631m in March, which had been the lowest level since November 2013.
However, net unsecured consumer credit was down from the April 2018 level of £1.8bn.
While consumers have clearly been less affected by Brexit uncertainties than businesses, the overall impression remains that they have become relatively cautious in their borrowing amid concerns over the economic outlook.
Meanwhile, lenders have become more careful about advancing unsecured credit - the first quarter of 2019 saw lenders further reduce the amount of unsecured credit available to households and again tighten lending standards.
Economists said that avoiding a cliff-edge Brexit at the end of March had eased “some of the immediate uncertainty and concerns” about the economic outlook, though any boost to the housing market would be shortlived.
“We believe that with Brexit being delayed until October 31 — and it is very unclear what will happen then — combined with a difficult domestic political environment, will weigh on the economy and hamper the housing market,” Howard Archer, chief economic adviser to the EY Item Club, said.
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