Since Brexit of June 2016, or the referendum on EU membership, penny-pincher Brits have taken credit card loan growth from double-dights to below 7% year-on-year (YOY). To boot British consumers spent more than they earned for a record ninth consecutive quarter in February raising concerns about the sustainability of the overall economy.
Based on consumer credit statistics, released this morning, by the Bank of England (BOE), total consumer credit growth slowed to a 6.3% YOY gain in February, compared to a revised 6.5% YOY gain in January, and 9.4% YOY one-year ago.
U.K. consumer credit card lending settled at £72.6 billion for a 6.5% YOY gain in February, compared to a revised £72.4 billion for a 6.7% YOY in January, and compared to £70.8 billion for an 9.6% YOY for February 2018.
U.K. other consumer loans, advances posted at £143.7 billion for a 6.2% YOY gain in February, compared to a revised £144.0 billion for a 6.5% YOY gain in January, and compared to £138.5 billion for a 9.3% YOY for February 2018.
Total U.K. consumer credit reports at £216.3 billion for a 6.3% YOY gain in February, compared to a revised £216.4 billion for a 6.5% YOY gain in January, and compared to £209.3 billion for an 9.4% YOY for February 2018.
The BOE notes the annual growth of consumer’s borrowing on credit cards and as other loans continued to slow, though at a more gradual pace than the second half of 2018. Furthermore, British households significantly increased deposits in savings accounts that pay interest in February.
The GfK Consumer Confidence Index for the U.K. was unchanged at -13 in March 2019, slightly above market expectations of -14, as a strong labour market offset ongoing Brexit uncertainty and concerns over global growth prospects. There was an improvement in expectations over the next 12 months regarding both personal finances (2 vs 1 in February) and the economic situation (-36 vs -38), while the willing the make big purchases deteriorated (1 vs 5).
Consumer Confidence in the United Kingdom averaged -9.02 Index Points from 1981 until 2019, reaching an all time high of 10 Index Points in June of 1987 and a record low of -39 Index Points in July of 2008.
The BOE noted the fact that Britain’s households spent more than they earned in every quarter but one since the referendum on EU membership will raise concerns about the sustainability of economic growth before the UK is scheduled to leave the EU.
U.K. Credit Card Loans
Feb 2017: £67.3 billion +9.3%
Feb 2018: £70.8 billion +9.6%
Oct 2018: £72.3 billion +8.3%
Nov 2018: £72.4 billion +7.9%
Dec 2018: £72.3 billion +7.1%
Jan 2019: £72.4 billion +6.7%
Feb 2019: £72.6 billion +6.5%
U.K. Other Loans/Advances
Feb 2017: £128.7 billion +11.1%
Feb 2018: £138.5 billion + 9.3%
Oct 2018: £142.7 billion +7.0%
Nov 2018: £143.1 billion +6.8%
Dec 2018: £143.5 billion +6.3%
Jan 2019: £144.0 billion +6.5%
Feb 2019: £143.7 billion +6.2%
U.K. Total Consumer Credit
Feb 2017: £196.1 billion +10.5%
Feb 2018: £209.3 billion + 9.4%
Oct 2018: £215.0 billion +7.4%
Nov 2018: £215.5 billion +7.1%
Dec 2018: £215.7 billion +6.6%
Jan 2019: £216.4 billion +6.5%
Feb 2019: £216.3 billion +6.3%
New and Revised figures as of 03/29/19
Note: Lending to individuals is split between lending secured on dwellings (mortgages) and consumer credit. Consumer credit is further split between credit card debt and other loans and advances. Student loans are excluded.