Consumer Payment Card News

U.K. Credit Card Debt Plummets as Brits Bit of Slackers

U.K.Credit Card Debt

U.K. credit card debt ticked down to its lowest annual growth rate since June 2014. Overall the annual growth rate of consumer credit slowed to 5.9% in April, five percentage points below its peak in November 2016. However, consumer credit increased by £0.9 billion in April, in line with the monthly average increase since July 2018.

According to figures released this morning by the Bank of England (BOE), U.K. consumer credit card lending settled at £72.7 billion for a 5.7% YOY (year-on-year) gain in April, compared to a revised £72.7 billion or a 6.6% YOY gain in March, and compared to a revised £72.7 billion for a 6.3% YOY increase for February 2019. One-year ago U.K. consumer credit card lending settled at £71.2 billion, according to figures collected by CardData.

Consumer Lending

U.K. other consumer loans, advances posted at £144.3 billion for a 6.0% YOY gain in April, compared to a revised £144.0 billion for a 6.3% YOY gain in March, and compared to a revised £143.7 billion for a 6.6% YOY increase for February 2019. One-year ago U.K. other consumer lending settled at £139.6 billion.

U.K. total consumer credit reported at £216.6 billion for a 5.9% YOY gain in April, compared to a revised £216.7 billion or a 6.4% YOY gain in March, and compared to a revised £216.4 billion for a 6.5% YOY increase for February 2019. One-year ago U.K. consumer credit card lending settled at £210.3 billion.

The BOE notes the extra amount borrowed by consumers to buy goods and services was £0.9 billion in April. This was in line with the average since July 2018, but below the £1.5 billion average between January 2016 and June 2018. Within consumer credit, net borrowing for other loans and advances increased to £0.7 billion, whilst credit card lending fell slightly to £0.2 billion.

In March slowing car loans had a major impact on consumer credit growth. The industry showed signs of softness with April representing the 10th straight month of year-over-year retail sales declines, according to CardTrak.

Consumer Spending

The British Office for National Statistics said the amount of goods sold outside of physical stores increased by 9.4% in the three months to April, the strongest growth of any quarter since comparable records began in June 1988. The internet spending boom was fueled by online promotions and warmer weather over the past three months after the hottest February on record and a sunny Easter weekend.

Online retailing accounted for 18.7% of total sales in April, up from 17.7% a year ago according to RAM Research.

Consumer Confidence

The GfK Consumer Confidence Index for the U.K. climbed to -10 in May, after remained unchanged for three months at -13. It was the softest decline since October of last year, as four of the subindices increased and one remained unchanged. The general economic situation index of the during the last 12 months remained at -30. Meantime, expectations for the general economic situation over the next 12 months increased 5 points to -29.

CardTrak, CardData, CardFlash Senior Analyst Robert McKinley suggested short-term gains in consumer an business lending in the U.K. will likely be limited due to the uncertainty as to when and how Britain would leave the European Union on the newly set Brexit date of Oct 31.

U.K. Credit Card Loans

(seasonally adjusted)

Apr 2016: £64.5 billion +7.1%
Apr 2017: £68.1 billion +9.7%
Apr 2018: £71.2 billion +8.8%
Apr 2019: £72.7 billion +5.7%

Additional & Historical Monthly U.K. Credit Card Loans Data

U.K. Other Loans/Advances

(seasonally adjusted)

Apr 2016:  £118.9 billion  +11.1%
Apr 2017: £130.3 billion +10.7%
Apr 2018: £139.6 billion + 8.8%
Apr 2019:  £144.3 billion  +6.0%

Additional & Historical Monthly U.K. Other Loans/Advances Data

U.K. Total Consumer Credit

(seasonally adjusted)

Apr 2016:   £183.4 billion + 9.7%
Apr 2017: £198.4 billion +10.3%
Apr 2018: £210.3 billion + 8.8%
Apr 2019: £217.0 billion + 5.9%

Additional & Historical Monthly U.K. Total Consumer Credit Data

New and Revised figures as of 05/31/19

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.

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Source: Bank of England; GfK; ONS; RAM Research; CardData; CardTrak; CardFlash