11/05/2021 | Press release | Distributed by Public on 11/05/2021 03:17
5 November 2021
New figures released today by the Finance & Leasing Association (FLA) show that consumer finance new business grew by 1% in September 2021 compared with the same month in 2020. In the nine months to September 2021, new business was 13% higher than in the same period in 2020.
The credit card and personal loan sectors together reported new business up by 25% in September compared with the same month in 2020, and growth of 12% in the nine months to September 2021. The retail store and online credit sector reported new business up by 1% in September compared with same month in 2020, and growth of 9% in the nine months to September 2021.
Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said:
"Some consumer finance sectors continued to report strong growth in September as they recover from the pandemic, but ongoing supply chain issues adversely affected the car finance market and slowed growth overall.
"The squeeze on household incomes from higher inflation (primarily driven by rising energy prices) and higher taxes is expected to weigh on consumer spending over the next year. It is not surprising that the Bank of England has refrained from raising interest rates at this time given that it expects the higher rates of inflation to be temporary and does not want to derail the recovery in the UK economy.
"Our latest research suggests that the industry has maintained its optimism about the opportunities for growth despite the risks to the recovery from supply chain disruption, higher inflation and further waves of Covid-19. The FLA's Q4 2021 industry outlook survey shows that 88% of consumer finance providers expected new business growth over the next twelve months."
Table 1: New consumer credit lending
Sep 2021 |
% change on prev. year |
3 months to Sep 2021 |
% change on prev. year |
12 months to Sep 2021 |
% change on prev. year |
|
Total FLA consumer finance (£m) |
9,513 |
1 |
26,020 |
5 |
93,800 |
5 |
Data extracts: |
||||||
Retail store and online credit (£m) |
745 |
1 |
2,125 |
4 |
8,980 |
6 |
Credit cards & personal loans (£m) |
4,324 |
25 |
12,767 |
26 |
44,568 |
2 |
Second charge mortgages (£m) |
102 |
78 |
298 |
112 |
1,000 |
12 |
Car finance (£m) |
3,976 |
-17 |
9,660 |
-13 |
35,415 |
9 |
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