Credit Card Customers In The UK To Increase Borrowing In Q1 2020
17 Jan 2020
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- Bank of England data shows credit card customers are set to increase consumption this quarter.
- At the same time, large firms will continue to decrease borrowing.
- Mortgage debt is also experiencing a falling demand in the UK.
According to an analysis made by the Bank of England, it is likely that credit card customers in the UK would be going for higher borrowing in the months to come considering the slow borrowing trends witnessed towards the end of 2019.
It is being estimated by the Bank of England that demand for debt acquired on credit cards would surge to 14.3 points in the current quarter, the second quarter is estimated to experience sustained demand, while the third quarter would see demand fall to 1.8 points. These points are represented on a specialized scale being maintained by the Bank to measure consumer demand for credit card debt.
The economy in the UK has been struggling ever since the referendum took place, mostly due to the loss of confidence on the part of businesses that stopped investing in the country. However, consumers have provided much-needed support to the economy during this time, with consistent spending.
According to the Bank, companies slowed down their borrowing behavior towards the end of 2019, especially in the concluding quarter. In the first quarter of the current year, the Bank expects to see an increase in borrowing by smaller companies. However, larger firms will likely continue to reduce their debt acquisition.
Also, the data revealed a fall in demand for mortgage loans as well, during the final quarter of 2019. The Bank estimates that this would continue to fall during this quarter as well.