Macmillan Jones - British Consumers Cut Borrowing

Macmillan Jones - British consumer borrowing declines in March as UK economy feels effects of heavy snowfall and Brexit uncertainty.

Macmillan Jones analysts say UK consumers reduced their borrowing during the month of March emphasizing the effect of unseasonably heavy snowfall that deterred shoppers from hitting the streets and pointing to a persistent weakness in the UK economy.

Macmillan Jones analysts say consumer borrowing increased by only 254 million pounds in March from the month before. Macmillan Jones analysts say this is further proof that the UK’s economic growth slowed in the first quarter of 2018 and would make it more difficult for the Bank of England to hike interest rates this month.

While Macmillan Jones economists had predicted that UK consumer borrowing would increase by 1.45 billion pounds in March, the yearly growth rate in unsecured consumer borrowing fell to 8.6 percent. This was its slowest rate since November three years ago and 0.8 percent less than the month before.

The fall in yearly growth rate was the most significant in almost nine years.

Consumer credit growth reached a peak of almost 11 percent in December of 2016 and has been declining steadily since then. Macmillan Jones analysts believe this is a reflection of the pressure exerted on banks by the Bank of England in order to rein in risky lending and the effects of growing inflation following the 2016 Brexit referendum.

The Bank of England stated that the number of home loans approved dropped from 63,781 to 62,914 in February this year which was slightly less than Macmillan Jones economists had predicted.

With only a year to go until Brexit when Britain officially departs the European Union, the UK’s economy showed hardly any growth in the first quarter of this year.

Source: Macmillan Jones