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 October):
“Mortgage approvals have risen for the fifth month in a row, signalling continued appetite for longer-term borrowing. Alongside this, the increase in remortgage approvals shows that both prospective and existing homeowners are engaged with the market.
“While this latest data paints a buoyant picture of the housing market, the ripple effects of the Budget and the corresponding hikes on fixed rate mortgage prices could dampen the outlook.
“October’s dip in consumer credit borrowing, combined with falling consumer confidence, points to worsening sentiment ahead of the Budget, as some borrowers paused their credit plans to see what impact it would have on their finances. Others may have been holding out for further base rate cuts before borrowing.
“With inflation now back above target and expected to rise in the coming months, many households will continue to struggle with their finances, particularly in the face of higher energy bills.
“With some expensive months ahead, lenders will need to be alive to the financial difficulties households may find themselves in as they navigate Christmas and the continued cost of living challenges. Access to debt and budget management support will be essential.”
