November surge in consumer credit suggests a 'Black Friday' influence
Martin Beck, senior economic advisor to the EY ITEM Club, comments:
“The key feature of the Bank of England’s numbers was a surge in unsecured borrowing, with net lending of £1.9bn in November being the highest since March 2005. This chimes in with the strong retail sales performance in Q4 and, in particular, with evidence that UK consumers made good use of ‘Black Friday’ discounts. In some cases, consumers may also have made use of credit to bring forward purchases of big ticket items that they had expected to make this year, with the prospect of higher inflation gradually seeping into the publics’ consciousness.
“By contrast, the release offered little of note on the housing market. Mortgage approvals tallied 67,505 in November, little changed from the October outturn of 67,371, while net mortgage lending held steady at £3.2bn for a third successive month. After the first half of 2016 was affected by distortions related to the increase in stamp duty on buy-to-let properties and second homes, the second half of the year saw activity settle at similar levels to those seen for much of the 2014-15 period.
“With a squeeze on real incomes in prospect this year, it is difficult to envisage any meaningful pickup in mortgage activity and we expect 2017 to be a pretty flat year in terms of both transactions and prices.”
Source - EY ITEM Club