Lending figures show individuals are cautious about new commitments
The latest statistics from the Bank of England on lending to individuals show that consumer credit and mortgage lending are still growing, but at very low rates.
Today’s figures (for November) show that total lending to individuals rose by £0.7 billion (less than 0.1 per cent) from October; growth over the previous twelve months was 0.8%, the same as in October. The growth in mortgage lending fell to £0.8 billion from £1.2 billion in October; this is still a little above the six-month average and the number of mortgage approvals was 1.5 per cent higher than in October.
Consumer credit (which makes up about one-sixth of total lending to individuals) was down slightly, despite an increase in credit card spending in the run-up to Christmas.
These figures underline the uncertainty that I mentioned yesterday. The instant reactions to the figures were negative, seeing them as confirmation of a downward trend. But they aren’t really that different from a well-established trend, as this chart from the Bank’s release shows:
It certainly isn’t the sort of picture you’d expect to see if people were confident about the economy, but no-one thinks that in any case. It confirms the sense that the household sector will be very weak this year – this now looks like a racing certainty.