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 and Credit statistical release from the Bank of England (for September): 

“September’s drop in borrowing suggests that softening headline and consumer price inflation, and hopes of further interest rate cuts, could be easing cost of living concerns for households.

“However, consumer confidence fell sharply in September, as households anxiously wait for decisions to come on tax, spending and welfare in the Budget. Some borrowers will be waiting to hear how this will impact their finances before deciding to take out more credit. Others may also be holding for further base rate cuts before borrowing.

“The recent easing of headline inflation is set to be short-lived as volatile oil and gas prices have risen on the back of heightened geopolitical tensions. This will create pressure on headline inflation and household energy bills.

“While default rates have fallen, these can be short-lived and with some potentially tricky months ahead for households, lenders need to remain ready to support those who will need financial help.  

“The drop in mortgage borrowing shows that appetite for longer-term secured borrowing has stalled after three consecutive months of growth. It could continue to fall if household finances are hit hard by the Budget and the Bank holds on further rate cuts.”

Ends-

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