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 December):
“It’s no surprise to see borrowing rise in a particularly expensive month when the cost of living remains high. A colder than average December triggered greater demand for energy, adding to households’ financial strain.
“While inflation marginally fell in December, headline inflation is forecast to remain above target this year. Consumer confidence remained suppressed in December due to the uncertain economic outlook.
“Some households will not have had a positive financial start to 2025 and with conditions set to remain challenging, lenders will need to be ready to provide the necessary support, particularly in debt and budget management.
“It’s surprising to see mortgage approvals rise in December given rising mortgage rates and the challenging economic outlook. Millions of households face higher mortgage costs this year, which will likely dampen mortgage demand among first-time buyers.”
