BoE Mortgage and Credit Card data: comment

The Bank of England announced today that net borrowing of mortgage debt by individuals decreased to £4.1 billion in April (down from £6.4 billion in March), and individuals borrowed an additional £1.4 billion in consumer credit in April (£1.3 billion of borrowing in March).  Annual growth rates of credit card borrowing was 11.6% (the highest since November 2005).

Source: Money and Credit – April 2022 | Bank of England

Commenting on the figures, Michael Davidson, Chief Revenue Officer at Freedom Finance, one of the UK’s leading digital lending marketplaces, said: “Increasing mortgage rates have unsurprisingly led to reduced lending volumes, after significant volatility this may be the start of a return to ‘normal’ pre-pandemic lending activity. We are already seeing an improve vs move trend throughout all our brand partnerships.

“The ongoing cost of living squeeze has seen consumers turn to credit for every day spending, we are seeing that in credit card use at the moment. It is likely that we’ll see a spike in personal unsecured & secured loans follow, as consumers look to consolidate debt later in the credit cycle, and we expect to see demand for high-quality unsecured credit increase as a natural consequence. Lenders are investing in easy to use online solutions that let borrowers shop around for the best rates easily without unduly harming their credit scores.”