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Consumers cautious with credit in run up to Christmas
New consumer credit fell by 2% in November as shoppers remained cautious in the run-up to Christmas, according to the latest figures from the Finance & Leasing Association. Spending through store cards, store instalment credit, personal loans and credit cards all fell, leading to an overall drop in lending by FLA members in November compared with the same month a year before.
In contrast, both new and used car finance rose in November 2011 compared with November 2010. Second-charge mortgage credit grew by 12%, mainly because the average sum borrowed grew; the number of people taking out second-charge mortgages fell.
Fiona Hoyle, FLA Head of Consumer Finance at the Finance & Leasing Association, commented:
“Once again, our figures show a fall in consumer credit spending, as consumers continue to take a cautious approach in uncertain economic times.
“This reinforces the need for the Government to make sure that any changes to regulation do not limit the supply of affordable, responsibly-provided credit.”
Table 1: New consumer credit lending Nov 2011
|
| Nov 11 | % change on prev. year | 3 months to Nov 2011 | % change on prev. year | 12 months to Nov 2011 | % change on prev. year |
| Total FLA consumer finance (£m) | 4,469 | -2 | 13,716 | +2 | 51,907 | -1 |
| Store cards (£m) | 191 | -5 | 478 | -6 | 1,802 | -14 |
| Credit cards & personal loans (£m) | 2,855 | -4 | 8,278 | 0 | 32,756 | -1 |
| Store instalment credit (£m) | 223 | -19 | 616 | -13 | 2,426 | -11 |
| Second mortgages (£m) | 28 | +12 | 80 | +1 | 284 | -7 |
| Car finance (£m) | 1,073 | +6 | 3,942 | +8 | 13,483 | +3 |
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Note to editors:
The Government is considering transferring responsibility for consumer credit from the Office of Fair Trading to the new Financial Conduct Authority, where credit markets will be regulated under the Financial Services and Markets Act, which is designed to regulate deposit-taking institutions.
In 2010 FLA members provided £72.0 billion of new finance to UK businesses and households. £51.7 billion of this was in the form of consumer credit, a third of all unsecured lending in the UK. And £19.0 billion of it supported the purchase of new and used cars, including more than half of private new car registrations in 2010.
For further media information, please contact:
Russell Hamblin-Boone, FLA
T: 020 7420 9656 E: russell.hamblin-boone@fla.org.uk M: 07810 374110
Helen Saxon, FLA
T: 020 7420 9664 E: helen.saxon@fla.org.uk M: 07918 766 993