BoE publishes its latest Money and Credit Report

The Bank of England has today published its latest monthly Money and Credit report showing consumer credit growth slowed to 6.6 percent in the year to December 2018. Outstanding balances for consumer credit stand at £215.6 billion.

The Bank of England says that the credit growth slow down reflects the continuation of relatively weak flows of new lending. The net monthly flow in December fell to £0.7 billion, reflecting less extra borrowing on credit cards.

The figures all showed that the extra amount borrowed by consumers to buy goods and services fell to £0.7 billion in December. Within this, credit card borrowing was particularly weak at only £0.1 billion, compared to an average of £0.3 billion since July. The overall consumer credit monthly flow was slightly below the £0.9 billion monthly average since July, and significantly below the average between January 2016 and June 2018 of £1.5 billion. A comparison with December 2017, using non-seasonally adjusted data, shows that the recent decline in net consumer credit reflects an increase in repayments more than offsetting higher gross borrowing by households.

Commenting on Bank of England consumer credit figures Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, said “While the slowdown in the rate of consumer credit growth is likely to grab most of the attention, the total amount outstanding continues to grow and remains worryingly high at over £215.bn.”

“For the majority of households, able to make repayments, this is unlikely to be a concern. However, we know that there are many people walking a financial tightrope where one change in circumstances, can be all it takes to push them into difficulty.”

“We heard yesterday that the numbers of people going insolvent is at a seven-year high, which reflects the challenging times many households still face. With much uncertainty in the economy, now is not the time for complacency.”

“More than one in three callers to National Debtline have an issue with credit card debt and credit card debt remains the most common debt type callers to the service face.”