Consumer lending experienced a 51 per cent increase in January 2022 from the previous year, as concerns about Russia’s war in Ukraine, rising costs of living and inflation continue to bite.
The sector for credit cards and personal loans had a major spike with a 55 per cent, according to new figures released by the Finance & Leasing Association (FLA).
New business grew by almost a quarter compared to the same period last year, while retail store and online credit, experienced just eight per cent growth in that time.
“The strong performance of the consumer finance market in January in part reflects shop closures during the third UK lockdown last year” said Geraldine Kilkelly, Director of Research and Chief Economist at the FLA.
Annual new business “in January was only two per cent below its pre-pandemic level” and the “economic outlook in the UK and globally has weakened following the invasion of Ukraine, with consumer price inflation in the UK expected to peak at more than eight per cent in the first half of this year.”
“This, combined with higher taxes and interest rates, will hit household disposable incomes and subdue consumer spending.
“Nevertheless, we continue to expect growth in FLA consumer finance sectors over the next year as members support consumers making essential purchases.”