Consumer finance growth slows
Figures from the Finance & Leasing Association (FLA) showed new business in December 2017 increased by 1% compared with the same month in 2016.
Retail store and online credit new business increased by 9% over the year. Second charge mortgages, new business increased 14% by value and 10% by volume over the same period. However, this too was slowing towards the end of the year, growing by just 1% in December.
The weakening of growth will be welcome by the Bank of England, which had been worried about the level of consumer borrowing. It was a key factor in its decision to raise interest rates in November last year.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “Growth in retail store and online credit new business in the final quarter of 2017 was consistent with the seasonal pick-up in retail sales.
“The overall performance of the consumer finance market in 2017 was in line with expectations. We expect the market to continue to report modest single-digit growth in 2018 as a whole.”