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Latest Bank of England consumer credit figures

ended 04. January 2023

On Wednesday morning at 09:30, the Bank of England is publishing its Money & Credit report for November 2022, which covers mortgages, savings, personal loans and credit card usage. Please answer the Qs below. If you're a Premium user, your response will be edited by an experienced journalist and appear at the top of the News Alert.

  • Are you seeing more people turn to unsecured personal loans and credit cards to shore up their finances as rates rise and energy bills soar? In short, are households under growing financial stress?
  • Are you seeing more people remortgaging or taking out secured loans (second charges) to free up some additional cash to help them through the cost of living crisis?
  • What was the demand for mortgages like in November (and December)? 
  • In October, mortgage approvals for house purchases continued their slide, falling to to 59,000 from 66,000 in September. Are you expecting to see this trend continue in November?
  • Are you seeing more people squirrel away money in savings accounts to help them through the potentially difficult 12-18 months ahead?

Any other thoughts and insights, jot them down.

4 responses from the Newspage community

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Editor
Wes Wilkes
CEO at IronMarket Wealth
The post-pandemic recovery in consumer spending
has been derailed by a severe squeeze on household
incomes caused by a combination of a steep rise in
inflation and tighter financial conditions.

There’s some scope for households to cushion the
blow by saving less. But that scope looks fairly limited
given that the household saving ratio is already
relatively low. And mortgagors facing a steep rise in
their debt servicing costs are likely to save more in an
attempt to better absorb higher payments.

We expect consumer spending to fall throughout
2023.
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Editor
Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Personal unsecured debt is shooting up, as the cost of living becomes a real tangible struggle. As mortgage lenders are reluctant to offer debt consolidation loans, more and more debt is being put on credit cards and overdrafts, then onto personal loans.

Secured loans will increase, as this is a viable option as debt consolidation as well as a vehicle that means the original interest rate for the major loan doesn't have to be refinanced. Useful, if the homeowner has a super low rate.

Mortgage approvals will fall to a new record low, and will continue falling until summer 2023 when the central bank will pivot on rates.

Unlike last months report, the savings ratio will struggle to increase much further as people are starting to rely on this cash as the cost of living bites, hard.
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Gary Boakes
Director at Verve Financial
Debt Consolidation to lower monthly costs has certainly become more popular over the last few months. Customers are looking at every opportunity to lower their monthly costs with the cost of living crisis having a major impact on our day-to-day finances.

"The credit card is 0% and we are paying it off over the next few years" is something we are also hearing a lot of as people are taking advantage of 0% credit cards for purchases rather than using their savings.
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David Robinson
Co-Founder at Wildcat Law
Credit, credit everywhere but not a pound of use! We are in the typical recession cycle of banks tightening credit criteria just at the point people need the liquidity. Expect to see increased use of existing facilities so credit card debt will rise as will drawn-down overdrafts. However many individuals and businesses will start to struggle as they are unable to access new credit lines that they need. This will ultimately result in potentially healthy businesses failing and people increasingly turning to IVA's and even bankruptcy.