Money and Credit data from the Bank of England
Karim Haji, Global and UK Head of Financial Services at KPMG, comments on today’s Money and Credit data from the Bank of England
Karim Haji, Global and UK Head of Financial Services at KPMG, comments on today’s Money
“The last quarter of 2023 saw a small but steady rise in approvals for house purchases and remortgages as cooling mortgage rates helped entice buyers and homeowners. With several lenders having already cuts rates this year with more expected, we could see some green shoots of hope for housing market recovery in 2024.
“But we aren’t out of the woods yet. The current economic outlook remains gloomy and stubborn inflation nudged back up in December. While inflation is expected to continue falling this year and affordability should start to improve, it will remain stretched for as long as interest rates remain high, which could be for some time yet.
“For homeowners whose fixed-rate mortgage deals come to an end this year, many will feel the shock of refinancing at much higher rates. December saw an upturn in people trying to lessen the shock by increasing payments on mortgage debt compared to November.
“Lenders reported a rise in defaults on both mortgages and credit cards in the run up to the festive season, and borrowing fell in December compared to the seven-year-high seen in November.
“With defaults expected to rise further in the first quarter, lenders must ensure customers have access to the right digital tools, knowledge, and personalised support to handle the challenging months ahead.”
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KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 17,000 partners and staff. The UK firm recorded a revenue of £2.72 billion in the year ended 30 September 2022.
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