MNI 5 Things: Unsecured Consumer Credit Growth Rebounds in Apr

By Jai Lakhani and Jamie Satchithanantham

     LONDON (MNI) - The following are the key points from the April money and

credit data release published Thursday by the Bank of England:

     - Net consumer credit rebounded robustly in April, having deteriorated in

from March. Unsecured credit rose to stg.1832bn from stg0.452 in March, the

strongest since November 2016. March's outturn had been the weakest showing

since November 2012.

     -This suggests that last month's result was more a one-off rather than

evidence of a trend in reduced appetite for financing spending through unsecured

borrowing. April's surge in consumer credit was driven by a pick-up in 'other'

lending, which includes motor finance. This rose to stg1.260 bn in April from

stg289mn in March, the highest since August 2017.

     - Mortgage approvals remained subdued in April, indicative of an insipid

housing market. Approvals were down marginally to 62,455 from 62,802 in March.

This was the lowest outturn of the year and the third consecutive monthly fall.

     -The rise in mortgage rates may be holding back house price inflation.

April data showed that quoted rates on both higher and lower loan-to-value (LTV)

deals had increased -- 2 year fixed 95% LTV rose to 3.95% from 3.77% while the

75% LTV rate increased to 1.70% from 1.53%. Nationwide house price data, also

published Thursday showed house prices down 0.2% m/m, taking the annual rate

down 0.2pp to 2.4%.

     -Loans to non-financial businesses fell by stg2.820bn in April, the lowest

net change since August 2017. Within this, loans to large businesses were down

stg2.1bn while loans to SMEs was down stg715mn, the lowest since December 2014.

This coincides with the latest estimate of Q1 GDP which reported the first fall

in business investment since Brexit.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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