Prior 66.16k; revised to 65.68k

Net consumer credit £1.8 billion vs £1.0 billion expected

Prior £0.8 billion; revised to £0.9 billion

Net borrowing of mortgage debt by UK individuals decreased to £5.3 billion in June, down from £8.0 billion in May but remains above its 12-month pre-pandemic average up to February 2020 of £4.3 billion. Meanwhile, approvals for home purchases – an indicator of future borrowing – dropped to ~63,700 in June and that is below the 12-month pre-pandemic average up to February 2020. This reflects a mixed picture of borrowing behavior in the UK, with consumer credit increasing beyond expectations but mortgage debt decreasing.

Consumer credit refers to personal loans, credit card borrowing, and overdrafts, while mortgage debt is specifically related to borrowing for home purchases. The increase in consumer credit could suggest that individuals are feeling more confident about their financial situation and are willing to take on more debt for spending. However, the decrease in mortgage debt could indicate a slowdown in the housing market, potentially due to factors such as economic uncertainty or changing attitudes towards homeownership.

It is important to monitor these trends in consumer borrowing, as they can have significant implications for the overall economy. High levels of consumer debt could lead to issues such as financial instability and reduced spending power, while a slowdown in mortgage borrowing could impact the housing market and related industries.

How This Will Affect Me

As a consumer, the increase in consumer credit could mean easier access to loans and credit, but it is important to borrow responsibly and consider your ability to repay debt. The decrease in mortgage borrowing could potentially lead to a more competitive housing market with fewer buyers, which may impact property prices and availability.

How This Will Affect the World

The trends in consumer borrowing in the UK can also have broader implications for the global economy, especially considering the country’s position as a major financial center. Changes in consumer behavior and borrowing patterns in the UK could influence financial markets and investor confidence worldwide.

Conclusion

It is essential to closely monitor changes in consumer credit and mortgage borrowing in the UK, as they can provide valuable insights into the health of the economy and potential future trends. Individuals should be mindful of their borrowing habits, while policymakers and financial institutions need to consider the wider implications of these borrowing patterns on the economy as a whole.