Households' ongoing appetite to borrow may be a blessing in disguise - EY ITEM Club comments
29 March 2017
- Household borrowing numbers yield few new developments
- Consumer credit continues to grow strongly
Martin Beck, senior economic advisor to the EY ITEM Club, comments:
“Households’ appetite to borrow has shown a degree of stability in recent months that February’s numbers did little to dispel. Total borrowing of £4.9bn was only marginally up on January’s level and annual growth remained unchanged at 3.9%. Mortgage lending increased, but by not enough to lift year-on-year growth from 3%.
“Concerns have been raised about the recent rapid growth in consumer credit and February’s numbers are unlikely to do much to allay them. The level of consumer borrowing may have declined to £1.4bn from February’s £1.6bn, but this still left annual growth at 10.5%, a near 11-year high. Furthermore there are signs of a further surge in credit card borrowing, up 9.3% year-on-year from 8.6% in January, the fastest since February 2006.
“However with real incomes under pressure from rising inflation, that households remain able and willing to borrow for spending may prove to be a blessing in disguise as far as the all-important consumer sector is concerned.”