UK consumers get back to borrowing as lockdown lifts

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FILE PHOTO: Shoppers carry bags in London
FILE PHOTO: Shoppers carry bags in London, Britain August 25, 2016. REUTERS/Neil Hall/File Photo

June 29, 2021

LONDON (Reuters) – British consumer borrowing rose in May for the first time since August last year, according to Bank of England data which showed the economy gathering speed as coronavirus restrictions were lifted last month.

Unsecured lending rose by a net 280 million pounds ($387.66 million) from April as consumers bought cars with dealership finance deals and took out more personal loans.

A Reuters poll of economists had pointed to a rise of just under 250 million pounds in May, having fallen in each of the previous eight months as households were largely stuck at home and reined in their spending.

The BoE data also showed net mortgage lending rising faster than expected in the Reuters poll, jumping by 6.6 billion pounds in May from April as home-buyers rushed to take advantage of an extended tax break offered by finance minister Rishi Sunak.

Earlier on Tuesday, data for June from mortgage lender Nationwide showed British house prices jumped by the most in annual terms in more than 16 years this month.

The BoE said mortgage approvals for house purchase totalled 87,500 in May, up only slightly from 86,900 in April and lower than the recent peak of 103,200 in November 2020.

($1 = 0.7223 pounds)

(Reporting by William Schomberg and Andy Bruce)