Growth in consumer borrowing in July

Consumer lending in July grew in almost all areas of high street consumer credit. The Finance & Leasing Association has urged the government to ensure that any new regulatory regime for consumer credit supports high street shoppers. July saw overall growth of 10% in the consumer credit provided by FLA members, compared with the same month in 2011. Store installment credit grew by 33%, car finance by 28% (by value), second-charge mortgages by 11%, and credit cards and personal loans by 2% during the same period. Spending in the store card market fell. Fiona Hoyle, head of consumer finance at the FLA, told Business Money news: “These figures show the importance of high street credit, whether provided by large retail chains or smaller independent stores, in helping consumers access the goods and services they require. The government will soon be taking decisions on a proposed new regulatory regime for consumer credit, and must ensure that high street businesses can grow and deliver consumer choice.” Interesting to see that retail finance has grown by such a significant amount compared to other unsecured forms of borrowing like credit cards and personal loans. Store cards which typically have a much higher APR than credit cards and instore retail credit offers dropped, not perhaps that surprising as customers become more aware of how they pay for goods.