The UK is a nation of consumers unfazed by the EU referendum end result when spending on plastic, says a commerce physique representing the foremost banks.
Bank card use for purchases in retailers has been highlighted by the British Bankers’ Affiliation (BBA) as the important thing to rising borrowing on playing cards.
There have been 168 million purchases on bank cards in July – the primary full month because the Brexit vote.
This was increased than in June and the common of the earlier six months.
Nonetheless, there was a drop within the variety of mortgages authorised for home purchases.
“This month’s statistics are the primary set of borrowing figures gathered because the EU referendum. The info doesn’t at the moment counsel borrowing patterns have been considerably affected by the Brexit vote, however it’s nonetheless early days. Many borrowing selections may also have been taken earlier than the referendum,” stated Rebecca Harding, chief economist on the BBA.
“We’re additionally clearly nonetheless a nation of consumers and the Brexit vote has accomplished nothing to vary the truth that we use bank cards for short-term purchases. Sturdy retail gross sales figures seem intently related to sturdy shopper credit score development.”
Many economists have predicted that the UK financial system will develop slower than beforehand anticipated because of the UK’s resolution to go away the EU.
This, partially, led to the Financial institution of England’s resolution to chop rates of interest to a brand new report low of zero.25% in August. A part of the speculation of an rate of interest lower is to encourage customers to spend reasonably than save.
The BBA figures cowl a interval that pre-dates this fee lower, however the organisation suggests that folks have been nonetheless keen to purchase within the retailers on bank cards, earlier than shortly repaying practically all of this borrowing shortly afterwards.
Borrowing by customers, excluding mortgage borrowing, rose by 6% in July in contrast with the identical month a yr earlier.
The BBA additionally stated gross mortgage borrowing hit £12.6bn in July, 6% increased than a yr earlier.
Nonetheless, the full of 37,662 mortgages authorised for home purchases in July was down 5% on the earlier month, and 12% decrease than the common of the earlier six months.
This might counsel that these planning to purchase a house might have taken a wait-and-see method with dwelling mortgage functions in the course of the referendum marketing campaign.
Figures from HM Income and Customs, revealed on Thursday, confirmed that property gross sales had remained relatively steady in July.