Bank of England data suggests recovery could be slower than hoped

It is difficult to shake the feeling that dark clouds loom on the economic horizon, says our personal finance campaigner.

Commenting on the Bank of England’s (BoE) latest Money and Credit statistical release, Myron Jobson, Personal Finance Campaigner, interactive investor, says: “The BoE figures suggest that while pent-up demand for consumer credit – mortgages in particular – was somewhat unleashed following the months of full lockdown, the recovery might be slower than hoped. 

“While net consumer credit borrowing remained positive in August at £0.3 billion, following a £1.1 billion increase in July, Brits cut down on both borrowing and repayments, which were both around 16% below pre-Covid levels. It is difficult to shake the feeling that dark clouds loom on the economic horizon, as the latest restrictions as well as the forecasted tide of unemployment threatens to dampen consumers’ ability to spend.

“The next couple of weeks will be a crucial time for many borrowers, with payment deferral stipulations by the Financial Conduct Authority in their current guise due to expire on 31 October. It is important for borrowers to re-evaluate their circumstances and consider their next steps. Opting for an alternative solution may be better suited to their current needs. While the FCA has since announced next-stage proposals to help offer continued support for users of certain consumer credit products facing payment difficulties during the coronavirus crisis, consumers should remember that payment holidays will not constitute free money – you’d need to pay it back.”