Christmas shoppers boost borrowing by 35 per cent

Click to follow
CONSUMER borrowing in the run-up to Christmas increased more sharply than at any time since the beginning of the recession, according to figures from the Finance & Leasing Association.

Credit advanced to consumers in November by FLA members, who account for 80 per cent of all lending outside the clearing banks and building societies, jumped by 35 per cent year-on-year to pounds 1.17bn. Personal loans rose by 44 per cent to pounds 204m and spending on store cards by 15 per cent to pounds 320m.

Compared with October, consumer credit showed an 8 per cent increase, with personal loans registering a 12 per cent rise and store card spending a gain of 18 per cent.

Tony Mallin, chairman of the FLA, said: 'Our November figures suggest that consumer confidence has returned and we expect to see this strong trend continue in December.

'However, it remains to be seen whether confidence is robust enough to withstand the delayed effects of the last two Budgets.'

Although 25 per cent up on a year ago at pounds 911m, demand for business finance in November was 31 per cent down on the previous month, due mainly to a sharp fall in leasing finance.

An Ernst & Young/Mori survey of 480 chief executives and senior directors of UK owner-managed businesses shows that 64 per cent are expecting their firm's output to grow over the next 12 months, with an average increase seen of 7.2 per cent, compared with the current official forecast of growth in gross domestic product of 2.5 per cent.

Comments