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):
“October’s slowdown in mortgage approvals and remortgaging points to the ongoing drag from affordability pressures and uncertainty over future interest rates.
The Chancellor’s Budget only offered modest relief for households, with tax thresholds remaining frozen and limited changes to ease day-to-day living costs. Against this backdrop, borrowers and lenders may continue to take a more cautious approach as they assess the outlook heading into the new year.
Another drop in borrowing signals a more restrained approach from households, as persistent cost challenges temper appetite for new borrowing.
While the Autumn Budget offered limited additional help for day-to-day costs, many households may continue to focus on managing existing credit commitments rather than taking on new ones.
Banks have a clear mandate from policy makers to get the economy moving. This means supporting those who can afford it, to invest, whilst ensuring those struggling day-to-day are supported. With falling interest rates and inflation proving stubborn in some key areas like food, lenders have a duty to ensure those who need financial support the most can access it as we enter an expensive month.”
