KPMG comments on BoE money and credit data - August 2022

Karim Haji, head of financial services at KPMG UK, said:

“It’s hard to take too bullish a view on the consumer picture when the expectation is still that inflation will top 10 percent this year, driven in part by huge rises in utility and petrol prices. It will be important to track credit card and consumer debt for additional signs of stress for consumers through the next two quarters.

“Major UK banks have this week reported no huge deterioration in credit quality, but they will be mindful of the need to support the most vulnerable customers through what will be a hugely challenging second half of the year. Meanwhile, reports from other parts of the economy, such as supermarkets, indicate that people are moderating their spending as far as they can to cope with the rising costs.

“The housing market continues to defy the vulnerabilities facing mortgage borrowers. While robust demand has kept house price growth strong in recent months, renewing a two-year fixed rate mortgage today would already result in an interest rate twice as high as just two years ago. This trend will likely continue as the Bank of England increases interest rates further this year.”

 

ENDS

 

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About KPMG:

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 15,300 partners and staff.  The UK firm recorded a revenue of £2.43 billion in the year ended 30 September 2021.

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 145 countries and territories with more than 236,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.