You are here: Home - Credit Cards & Loans - News -

New consumer finance rises 12% in January

Written by:
New consumer finance business grew 12% in January, compared with the same month last year, while retail store and online credit new business increased by 13% over the same period.

The figures, released today by the Finance & Leasing Association (FLA), are likely to add fuel to calls for a rate rise in May to prevent borrowing spiking higher.

The figures come days after the UK financial regulator warned that the mid-cost segment of the consumer lending market was at risk of being ‘overwhelmed by demand’.

However, this contrasts with figures last month from UK Finance, which showed families cutting back on borrowing for the first time since mid-2013, Its figures showed personal loans and overdraft usage falling by 4.6% a year on year. Credit card borrowing rose by 4.8%, but this was the slowest increase in two and a half years.

Geraldine Kilkelly, head of research and chief economist at the FLA, said the new figures reflected confidence among households: “The performance of the consumer finance market in January reflects a resilient household sector. Despite the squeeze on real earnings from higher inflation, consumer confidence about the outlook for their own finances and spending has held up. The labour market remains robust, with record levels of employment and a pick-up in earnings growth.”

The second charge mortgage market also saw higher growth in January, with new business up 8% by value and 13% by volume compared with the same period in 2017. New business in the point of sale (POS) consumer car finance market increased 7% by volume and 13% by value in January, compared with the same month in 2017. However, new business volumes in for new cars fell by 4% compared with January 2017, while volumes for used cars rose.

Car sales are often taken as a leading indicator for the health of the economy. As such, this may suggest some caution among households for larger purchases.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co... Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
Income protection holders risk limited pay outs

People who choose to buy income protection may not be shielded as well as they believe when illness or injury...