Spending on Credit Remains Low
Consumers are cautious about taking on more credit, the latest statistics reveal, as high street spending remains sluggish.
Store card sales were found to be down by 21 percent in March, when compared to March last year. While store instalment credit was also down by 28 percent, and credit card spending – an indicator of smaller purchases – was down by eight percent.
These figures released by the Finance & Leasing Association (FLA), the trade body for the consumer credit industry, suggest this is due to real disposable income being hit by low wage growth. The cost of living has also risen causing consumers to keep a tighter hold on their spending.
“Our figures accord with a number of recent surveys showing that consumer confidence in the economy remains low,” said Fiona Hoyle, Consumer Finance Head, FLA.
“As a result, consumers are wary about spending and taking on additional financial commitments.”
Hoyle continues to explain FLA members lent a total of £4.8 billion to customers in March for household essentials, indicating the importance of consumer lending.
Research by Halifax revealed recently the cost of owning and running a house is up on average by 1.4 percent from March last year. This is also despite interest rates having remained low for a record period of 26 months.
Inflation has also risen and currently stands at 4.5 percent due to a combination of price hikes in the transport sector as well as food prices going up, and the cost of energy.
London has the highest annual cost of running at home at £11,783 and the lowest is in the North East at £7,420. In relation to earnings the East of England has the highest ratio of 31 per cent.