Debt growth slows in the UK

New statistics show that, having reached a peak in April the growth of debt per adult is now beginning to slow. The June 2018’s Money Statistics – produced by The Money Charity finds that growth over the previous 12 months has slipped to £949.30 per adult.

Whilst this is still a growth, it has been a year since the statistics reported a growth under the £1,000 mark, reaching its highest in April at £1,169.92. Since then growth has slipped in the past 2 months by £143.18 in May, and then a further £77.44 this month.

This drop in debt growth is backed by a similar reduction in outstanding consumer credit lending to individuals which fell in March for the first time since September 2015. Further falls have occurred in total net lending to individuals by UK banks and building societies, falling by £0.04bn – £0.99m every day in April according to the Money Statistics. Again, this is a figure which hasn’t fallen for over 5 years. Net lending to individuals overall fell by £362m, the amount approved for house purchases to individuals by £347m and secured lending by £1.598bn in April, according to the Bank of England.

This may be seen as a positive sign for many in the industry who have been concerned about a debt bubble continuing to swell in the UK. However, the cost of credit continues to rise with the average interest rate on credit card lending rising to 18.26% meaning the impact may not yet be being felt in household budgets.

Michelle Highman, Chief Executive of The Money Charity says: “It is good to see signs of a reducing debt burden on people in the UK, as well as evidence against a swelling debt bubble. However, growing credit card interest rates and faltering or stagnating savings rates indicate that this fall in debt may not yet have had much impact on the real lives of those struggling to make ends meet.  If your debt burden feels overwhelming there is help out there so don’t put off making that first step.”

Other key points from the May Money Statistics:

  • 4.1p increase in unleaded and diesel petrol per litre on last month.
  • £29m fall in Public Sector Net Debt per day in 2018.
  • 21% increase in debt issues reported by Citizens Advice on last year.

The Money Statistics June 2018

Striking numbers
£0.99m: The decrease in net lending to individuals in the UK.
20: The amount in properties repossessed every day.
£77.44: The fall on last month in UK debt increases for each adult.
21%: The increase in debt issues reported by Citizens Advice on last year.
£29m: The fall in Public Sector Net Debt per day in 2018.
4.1p: The increase in unleaded and diesel petrol per litre on last month.
18.26%: The increase in the average interest rate on a credit card bearing interest.
34: The number of mortgage repossessions every day in Q1 2018.
0.2%: The decrease on house prices on last month according to Nationwide.

Everyday in the UK
Net lending to individuals in the UK decreased by £0.99m a day in April 2018.
Government debt fell by £29m a day during 2018.
LINK Cash machines were used an average of 90 a second across the UK.
304 people a day are declared insolvent or bankrupt. This is equivalent to one person every 4 minutes and 44 seconds.

Personal debt in the UK
People in the UK owed £1.539 trillion at the end of April 2018. This is up from £1.535 trillion at the end of April 2017– an extra £949.30 per UK adult.
Per adult in the UK that’s an average debt of £30,597 in April – around 113.9% of average earnings. This is slightly down from a revised £30,604 a month earlier.
Outstanding consumer credit lending was £210.6 billion at the end of April 2018.
Citizens Advice Bureaux across England and Wales dealt with 505,512 issues in April 2017.
Debt was the second largest advice category (behind benefits and tax credits) with 126,429 issues. This is up 21% on the same month last year. Debt issues represented 25.5% of all problems dealt with over the period.

Mortgages, rent and housing
The average mortgage interest rate was 2.49% at the end of April. This stood at 2.05% for new loans. Based on this, households with mortgages would pay an average of £3,081 in mortgage interest over the year. New loans would attract an average of £2,860 in interest.
Halifax estimate that house prices rose by %.5% compared to last months estimate, up by 0.2% over the quarter and 1.9% annually. Nationwide estimate house prices fell by 0.2% in May, up 2.4% on 12 months ago.
According to UK Finance, the typical first-time buyer deposit in November was 16.6% (around £27,955) – 104% of an average salary.

Savings and Pensions
9.614 million employees had joined a pension scheme under auto-enrolment by the end of April 2018.
The average interest rate for an instant access savings account – not including bonus interest payments – was 0.19% in February. For a cash ISA, this was 0.68%.

Spending and Loans
Data from LINK shows that, on average, 90 cash machine transactions (including balance enquiries and rejected transactions) were made every second in April 2018.
In total, cash machine transactions were worth an average of £3,793 in April 2018.
The average APR for a £5,000 personal loan is 8.14%, according to the Bank of England. For a £10,000 loan it’s 3.81%, while the average rate for an overdraft is 18.26%.
It cost an average of £23.61 a day for a couple family to raise a child to the age of 18.
It cost an average of £28.48 a day for a lone parent family.

The bigger picture
The UK economy grew by 0.1% between January and March 2018, according to latest estimates from the ONS, the lowest growth since Q4 2012.
Public Sector Net Debt fell by £29 million during 2018.
97,000 people (1,054 a day) reported they had become redundant over the three months, a decrease of 5,000 on the previous quarter.


The Money Charity is the UK’s financial capability (financial education) charity. Our vision is that everyone has the ability to be on top of their money as a part of everyday life. We empower people across the UK to build the skills, knowledge, attitudes and behaviours to make the most of their money throughout their lives.

Bank Economists See Robust Economy Pushing Unemployment Rate to New Lows

WASHINGTON — This year the U.S. economy will enjoy its strongest growth this cycle, pushing unemployment to the lowest rate in nearly half a century, according to the Economic Advisory Committee of the American Bankers Association.

The consensus of 16 chief economists from among the largest North American banks is that the economy, entering a tenth year of expansion, will see inflation-adjusted GDP growth accelerating to 2.8 percent this year – the strongest pace since 2005 – up from 2.6 percent last year.

“We see the economy as fundamentally strong this year with little down drift in major sectors,” said Ellen Zentner, chair of the group and chief U.S. economist for Morgan Stanley. “Tax cuts and regulatory reform will help support continued growth in business investment.”

Business investment and a pickup in federal government spending were key drivers that led the group to revise upward its GDP forecast this year from January’s forecast of 2.4 percent. The committee expects business capital spending to grow for the second straight year at about 6 percent in 2018.

The group expects growth to slow toward its long-run trend next year.

“The slowing will occur as the tax impact begins to fade, fiscal spending moderates and the Fed continues to raise short-term interest rates,” Zentner said.

The committee spent a great deal of time discussing the risks to the forecast, and trade policy dominated the discussion.

“There were a wide range of opinions about the impact of potential trade actions, but there is no question that the committee believes lingering uncertainty threatens to dampen business investment,” said Zentner.

The committee’s forecast does not incorporate a significant escalation of trade tensions. However, should there be an escalation, the committee expressed concerns.

“Supply chain disruptions and other secondary effects such as tightening of financial conditions could have a cumulative impact that would adversely affect economic growth,” Zentner said.

The committee is forecasting unemployment to drop to 3.6 percent by 2019. Such a low unemployment rate will likely generate more wage pressure, which could help drive inflation beyond the Fed’s expectations.

“If inflation were to rise appreciably above the Fed’s 2 percent goal, particularly in a tight labor market, it would likely trigger a more aggressive monetary policy response,” Zentner said.

Households’ financial health will remain solid. Advances in jobs, higher wages and cuts in personal income taxes will sustain consumer spending above 2 percent annually through next year, according to the group. Purchases of durable goods, including automobile sales, are predicted to remain strong but slacken a bit from last year’s peak, a normal late-cycle phenomenon. Moreover, even with mortgage interest rates rising, the committee sees strong demand driving home prices up 6.4 percent nationally this year followed by 4.2 percent next year.

The group expects the Federal Reserve to continue edging the federal funds rate higher. Following three rate hikes last year, the group consensus is for four total this year – with additional rate hikes in September and December – followed by three in 2019.

The committee sees persistent strength in the availability of bank credit, with delinquency and charge-off rates holding near historical lows. Bank consumer credit grew 4.2 percent last year and is forecast to grow 5.0 percent this year, while business credit rose 0.7 percent last year and is forecast to grow 3.0 percent in 2018.

The members of the 2018 ABA Economic Advisory Committee are:

EAC Chair Ellen Zentner, chief U.S economist, Morgan Stanley, New York;
Scott A. Anderson, EVP and chief economist, Bank of the West, San Francisco;
Scott J. Brown, SVP and chief economist, Raymond James Financial, St. Petersburg, Fla.;
Beata Caranci, SVP and chief economist, TD Bank Group, Toronto;
Robert Dye, SVP and chief economist, Comerica Bank, Dallas, Texas;
Gus Faucher, SVP and chief economist, PNC Financial Services Group, Pittsburgh, Pa.;
Ethan Harris, head of global economics research, B of A Merrill Lynch, New York;
Peter Hooper, chief economist, Deutsche Bank Securities Inc., New York;
Nathaniel Karp, chief economist, BBVA USA, The Woodlands, Texas;
Bruce Kasman, managing director and chief economist, JPMorgan Chase & Co., New York;
Kevin Logan, chief U.S. economist, HSBC Securities Inc., New York;
Christopher Low, chief economist, First Horizon National Corp’s FTN Financial, New York;
George Mokrzan, SVP and director of economics, Huntington Bancshares, Inc., Columbus, Ohio;
Richard Moody, SVP and chief economist, Regions Bank, Birmingham, Alabama;
Doug Porter, chief economist and managing director, BMO Financial Group, Toronto; and
Carl Tannenbaum, chief economist, The Northern Trust Company, Chicago.

The American Bankers Association is the voice of the nation’s $17 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $13 trillion in deposits and extend nearly $10 trillion in loans.

Leeds-based Lowell gets 4th Gold for service

Lowell, the leading European credit management company based in Leeds, has again achieved Investors in Customers’ (IIC) Gold status. This is the fourth year in a row Lowell has gained their highest rating.

The IIC ‘Gold’ is recognised as one of the UK’s leading customer service awards schemes, and Lowell’s Gold status reflects its ongoing commitment and delivery of the highest levels service again.

UK Managing Director, John Pears, said: “I am very pleased for the team here that their hard work and professionalism has been recognised with this award. Every day we try to make a positive difference for people dealing with their finances – this awards shows that we are doing it the right way.

“To maintain this level for a fourth year shows that we have not been complacent and have innovated and improved on what we do, and we will keep doing this to make sure we deliver the best service we can.”

IIC made this year’s award after surveying over 3,500 customers and employees of Lowell Financial, Lowell’s UK arm. The survey assessed Lowell Financial’s understanding of customer needs, and its delivery of services to meet those needs. IIC makes its assessment across a number of key areas including:

• Ease of doing business with the organisation
• How customer feedback is sought and addressed
• Quality and range of services offered e.g. payment solutions
• Clarity of communications
• Getting things right first time
• Overall customer service and satisfaction

Experian secures FCA accreditation to supply Open Banking and PSD2 services

The UK’s largest credit reference agency, Experian, can now offer Open Banking and PSD2 (Payment Services Directive 2) services to enable the exchange of bank account information between people and organisations. The FCA has given it permission to operate as an Account Information Services Provider (AISP).

The accreditation allows Experian to help people and organisations benefit from the Open Banking initiative. A new suite of products will allow customers to share data in a secure and compliant way. This will complement Experian’s existing credit bureau services.

Tom Blacksell, B2B Managing Director at Experian, said: “This accreditation from the FCA underlines our commitment to support Open Banking. One bank has already signed up to use Experian’s Open Banking platform, and we’re running several proof of concepts with other clients so they can explore a range of innovative new services.”

Open Banking will help people to prove they can afford products, even if they have a limited credit history. When people choose to share bank account information with financial service providers they can receive the more appropriate products, improved services and better deals.

It will be a useful tool for organisations to ensure they only lend people and small businesses what they can afford to repay, while it will be useful to price comparison websites, brokers and background checking providers.

Open Banking will also help lenders to meet FCA regulatory obligations on affordability and reduce costs when processing applications. Adopting new data assets will be easier from both a technical and consumer support perspective.

In 2017, Experian acquired Runpath, a UK-based fintech company, which improves its ability to aggregate Experian data with external sources. Many of the UK’s leading price comparison websites use Runpath’s technology, and it has also been used to test the government’s Pensions Dashboard concept. New services will be brought to market using Runpath as Open Banking APIs continue to be implemented in the coming months.

1st Stop increases its maximum loan amount for 2nd Charge in Northern Ireland to £35k

Homeowners in Northern Ireland can now take out a second charge secured loan of up to £35k, with specialist loan provider, 1st Stop Home Loans. The other great benefits of a 1st Stop secured loan still remain including no first mortgage consent application required up to £35k and only 1 month’s mortgage history required.

1st Stop Group offer a range of loan products including personal loans, homeowner loans and car finance to those customers who are looking for an alternative to a high street lender.

Commenting on the decision to make this change, Head of Sales, Nigel Brookes said: “This increase is in response to a need we have seen in the market and we hope it will give our broker network more flexibility and enable us to service the important Northern Ireland market more effectively.”

Creditfix Ranks Among Top 20 Companies To Work For In Scotland

The UK’s biggest personal insolvency practice Creditfix has taken 15th spot in a major employee poll to uncover the best companies to work for.

Headquartered in Glasgow, the firm is the only debt advice specialist to appear in the 2018 “50 Best Companies to Work For in Scotland”, scoring high marks in three key areas – wellbeing, community initiatives and employee engagement.

Workplace engagement expert Best Companies, whose results are published in the Sunday Times, carried out the survey and used anonymous employee responses to generate the Regional Best Companies Index (RBCI) score.

Creditfix was praised for its positive office atmosphere, relaxing breakout areas, and its community outreach, which includes supporting mental health programmes at Motherwell Football Club.

The survey also revealed that 94 per cent of employees believe they can make ‘a valuable contribution to the success of the company’, and feel up-to-date with what is happening.

Commenting on the results, Andy Taylor, director at Creditfix, said: “We work with more than 75,000 clients across the UK, who are experiencing severe financial difficulties and all the emotional stress that brings. It’s therefore crucial that we look after our employees and ensure their own health and wellbeing is not negatively impacted.

“As well as providing health insurance and tickets for music and sport events, we have created a working environment that enables staff to take time out when needed, and also get out of the office to volunteer.”

Last month, Creditfix announced plans to expand with a second office in Salford, Greater Manchester with the creation of up to 50 new jobs in the region.

“This is a really exciting time for us, and we’re looking forward to establishing ourselves as an attractive place to work in Salford,” added Andy.

Liquid Voice Adds Real-Time Voice Analytics For Contact Centres

Liquid Voice, a leading provider of interaction recording, quality management and analytics, has announced the immediate availability of Real-Time Analytics. Developed in partnership with Speechmatics, a leading global supplier of Automatic Speech Recognition (ASR) solutions, this new capability provides instant insight on interactions as they happen and will deliver significant benefits in a wide range of contact centre and compliance applications.

According to Matt Marris, Product Manager at Liquid Voice: “This new Liquid Voice analytics solution provides contact centres with real-time insight and overcomes the drawbacks of other analytics platforms which can take from 15 minutes to 24 hours to deliver the required results. Unlike previous real-time solutions, it uses deep-learning to create transcripts of the calls. This enables us to deliver more advanced features around script adherence, compliance and real-time alerting.”

The new Liquid Voice Real-Time Analytics solution transcribes interactions as they happen rather than waiting until they have finished. It enables multiple interactions to be transcribed in multiple languages simultaneously and identifies the type of call allowing agents to be provided with relevant and appropriate prompts when they need them. This helps to ensure script adherence compliance on every call as well as making it quicker and easier to identify vulnerable callers.

Enhanced stereo transcription functionality is also included which efficiently analyses each speaker channel separately. This further improves the accuracy of transcriptions and gives greater insight into sentiments expressed by each person during interactions. Up to six speaker channels can be simultaneously transcribed allowing this functionality to be extended to courtroom, interview and conference calling applications.

“Liquid Voice is focused on an ongoing programme of development that positions the company as an innovation leader in the industry,” continued Marris. “Working with world-leading technology companies such as Speechmatics enables us to provide our customers with cost effective solutions that drive the achievement of real and sustained business benefits as well as giving Liquid Voice a significant competitive advantage.”

Who wins the 2018 Economic World Cup?

By Steen Jakobsen, Chief Economist and CIO at Saxo Bank

“Some people think football is a matter of life and death. I assure you, it’s much more serious than that” – Bill Shankly
I am not one to argue with one of the best, if not the best, football managers ever. This is our attempt to connect the all-important world of football to the comparatively boring one of economics. Like any boy who has played football, I fancy myself as something of a connoisseur, so here is my official call for the 2018 FIFA World Cup 2018: Belgium will be the champion.

Odds-on favourites Brazil and Germany have both lost momentum, and besides, these are the consensus calls. Instead, I will go with a country small in size, but big in terms of its players’ abilities.

(The irony of pointing to Belgium and hence Brussels is not lost on me at a time where Europe is about to face a potential existential crisis!)

Here at Saxo Bank, we are both followers of the FIFA World Cup as well as active participants in the financial and economic spheres; as such, we are running a series of pieces containing our thoughts on the contests and championships taking place in these areas.

For the World Cup in economics we have constructed a matrix of factors which will predict the group stages and the ultimate winner based on the following metrics:

– Misery index: This good old index combines a country’s inflation with its unemployment (the lower, the better and its 12-month trailing stock market performance (the stock market is perceived to be a gauge for the overall performance of a country, and higher is of course better).

– CDS spreads: The “insurance premium” of hedging the downside of an economy measured as a basis-point premium (the higher, the worse).

– Gini-coefficient: This metric measures inequality and the overall equality of a country secures long-term growth. There is also an increasing understanding that education and access to education creates a more productive society (lower is better).

These four parameters are equally weighted and then ranked from one to 30: number-one performers thus win their categories, and the overall lowest combined score wins.

So what does our podium look like in the 2018 Economics World Cup?

World champion: Iceland – 6.0
Second place. Denmark – 8.0
Third place: Japan – 7.5

In fourth place we find Germany with a score of 9.5. In fact, South Korea actually ranks higher than Germany with 8.3 , but they lost in the quarter-finals to Japan with 7.5, while Japan then – despite a higher score than Denmark – failed to win the semi-final versus Iceland, hence the result above.

In economics as in football, every match matters!


Economic commentary

So: Iceland wins by having the best Gini coeffient plus a low Misery Index score, while Denmark failed to score enough goals (stock market performance over the last 12 months) to beat its Scandinavian kid brothers.

Rest assured that this is no “reverse engineering” process employed to make our native Denmark outperform! We simply ex ante decided which four components make up not only a strong economy, but also one with forward momentum.

What I find interesting is that the actual favourites of the 2018 FIFA World Cup all rank extremely low in economic terms. Is this the story of football often being the only road away from no hope, no future, and no education? Or is it more that it is the culture of football that prevails?

Probably a little bit of both, but as for our chosen economic measurements, I suggest you think like a football manager:

The stock market is the attack. Flashy, headline-grabbing, but often a function of self-confidence and momentum more than actual long-term strength. There will be period of goal drought for even the best frontline players. The table of the strongest stock markets over the last 12 months is quite surprising:

Note: Iran is represented by the Brent crude oil contract as access to the Tehran Stock Exchange is disabled by sanctions, but note the performance of Tunisia and Peru: +51.5% and 38.2%. Great flair, clearly!

The Gini coefficient is the midfield. Any economy needs equality as a fuel to drive growth higher. We perceive equal access to education to be the number one differentiator of productive versus non-productive societies. If you rank the world according to GDP per capita, the “richest countries” really only have one thing in common: a universal broad educational system that is often free and accessible to all of society.

The top three Gini coefficent countries are:

Classic Northern Europe-ish countries win the day while Latin America and the Middle East come up very short.

Credit default spreads represent the goalkeeper: protection against mistakes and the ability to pull off a difficult save and still play offensive football.

The strongest goalie is perceived by many as the one key differentiator at the very top level. There are many defenders, many midfield players, and few attack players… but there are extremely few good goalkeepers.

We see great goalkeeping from:

The Misery Index represents defence. Defence is about making the least of amount of mistakes, and closing down space for the opposition. Any economy with a balanced mix of unemployment and low inflation is off to a good start. Pricing power is visible and stable and the burden of unused resources is minimised. It’s not enough to drive the game forward, or set up a goal, but it’s an excellent start.

Here is the breakdown by group and then the knock-out stages (number one is the winner; four is the loser:

Bill Shankly was right: the fact that all banks, including Saxo Bank, need to engage with the 2018 FIFA World Cup not only shows how important it is, it also demonstrates its impact on everything from a country’s confidence to its economic performance.

There are probably many links/correlations which can be discovered by Artificial Intelligence, but having been on the losing team one too many times, I can tell you: there is no bigger pain than losing in football – not even in trading!

(Mind you, as an economist you are always losing!)

Football remains the world’s biggest sport for a reason. It is a game everyone can play without any economic resources required: you can play in the streets, in your apartment, with a ball, with a sock, or with an orange!

On the field you are only measured by your contribution, not by your social status or your job; if anything, the higher your ranking in these areas, the more you need to give to the team. Football, or the football team, is the precise model on which societies should be built.

There are fundamental rules that need to be understood. The team is always bigger than the man (yes, even Ronaldo). There is room for a star, but only if he delivers. Should he fail, he’s gone (out). The winningest teams in the world win because they are teams, not 11 individual players.

As the world greatest goalkeeper (CDS!) once said:

“In football, you win as a group, you lose as a group; you divide the credit and the blame” – Gianluigi Buffon

First and foremost, you need to accept, like, work with, and subordinate yourself to the team in order to win. This is something that popular contemporary concepts and buzzwords – social media, AI, robots, nationalism, individualism – neither contain nor reflect.

Maybe that’s the overall lesson: as the world moves to dehumanize work and private life more and more, the thirst for being part of something like a team increases – there is nothing like the camaraderie, the post-game beer, and the self-congratulation with people you have played with for 10, 20, or in my case 30 years.

I wish everyone an amazing 2018 FIFA World Cup and again, congratulations to Iceland on winning the World Cup in economics: a truly phoenix-like recovery on the part of our Nordic brother.

New artificial intelligence-driven software has potential to change the customer experience delivered by call centres forever

CallMiner, the leading platform provider of award-winning speech and customer engagement analytics, announced today at Customer Contact Week 2018 the launch of its comprehensive CallMiner Eureka platform and new analytics modules: Analyze, Coach, API, Redact, and Alert. Powered by the Eureka data mining engine, the new modules are built to meet the full range of customer intelligence needs from real-time to post-contact analysis.

Each of the AI-driven analytics modules now leverages the core Eureka data processing engine that was enhanced earlier this year. By consolidating all modules onto a single platform, customers benefit from faster improvements, shared administration, and greater interoperability across the entire product suite.

“Our new analytics modules were aptly named to focus on the key pillars of engagement analytics – Analyze, Coach and Alert, plus API for data integration and Redact for security,” said Bruce McMahon, Director of Product Management at CallMiner. “Deploying all of these modules on the scalable and elastic Eureka mining platform is the culmination of our 2018 goal of a true cohesive platform concept with full product and data integration.”

With the consolidated platform, customer interaction data can now seamlessly transfer from real-time analysis in Alert to post-contact categorization and scoring in Analyze as calls are mined through a single data processing engine, saving both time and cost. In addition to speed, the scalability of the single Eureka engine provides the ability to mine data from tens of agents up to tens of thousands of agents at any given time. Data can also be extracted from or pushed to any of the modules with the real-time ingestion API, a core pillar of the CallMiner SaaS platform model.