Data from the Bank of England show that high-end lenders expect an increase in the number of non-performing loans and corporate loans over the three months to the end of June. Details from the quarterly “credit conditions” survey of the UK’s largest banks and credit card providers showed expectations for increased demand for consumer lending in the coming months. However, he also suggested that lenders were not worried about losses despite the expected rise in default rates. Paul Heywood, head of data and analysis at Equifax UK, the consumer credit service, said the data reflected a worsening of the situation that had developed over several months. “Significant sections of the UK’s population are experiencing financial hardship, with families at the bottom of the income scale being hit hardest. “The pressures of the cost-of-living crisis are increasing the demand for credit, especially in the areas of unsecured lending and credit cards, while the same inflationary pressures, along with rising interest rates, are stifling demand for discreet lending,” he said. Official figures show that inflation in the UK jumped to 7% in March, the highest level since 1992, while economists said the measure for the annual rise in the cost of living is likely to exceed 9% this month. higher than 1982, during the Margaret Thatcher period. first government. The Bank of England is expected to raise interest rates widely at its monetary policy committee meeting early next month, with inflation now more than tripling the official 2% target. Although average wage growth has accelerated in recent months, it has failed to keep pace with rising inflation and is expected to contribute to the greater squeeze on disposable household income since records began in the 1950s. Wealthy households managed to save billions of pounds with each other during the pandemic, as the lockdown kept people away from stores and prevented them from vacationing abroad. However, the poorest families have been hit hardest financially and are expected to bear the brunt of the extraordinary cost of living this year. Sarah Coles, senior financial analyst at Hargreaves Lansdown financial platform, said lending is likely to become more difficult in the coming months. “Demand for loans and credit cards has increased since the beginning of this year. “With inflation accelerating and dramatic price increases for many of the necessities, it has forced more of us to borrow to make ends meet.” Credit card lending jumped 1,5 1.5 billion in February to ,5 59.5 billion, the highest since records began in 1993, sparking concerns that low-income households were turning to expensive lending to deal with rising costs of food, clothing and fuel. Economists say squeezing the cost of living will cut consumer spending later this year, boosting Covid’s economic recovery. However, National Statistics Office (ONS) data on Thursday showed a slight reduction in the appetite for spending so far. The ONS reported that spending on credit and debit cards in the UK increased slightly by 2 percentage points in the seven days to 4 April, including an increase in arrears and social spending.
