Shop­pers defy the Brexit blues

Credit spend­ing spree af­ter EU exit vote

Daily Mirror - - CITYDESK -

BRITS ban­ished Brexit fears to go on a credit-fu­elled spend­ing splurge last month.

House­holds slapped £291mil­lion more on their credit cards than they re­paid in July, ac­cord­ing to fig­ures from the Bri­tish Bankers’ As­so­ci­a­tion.

The jump, up nearly a fifth on July 2015, came de­spite re­ports that con­sumer con­fi­dence had tanked in the wake of the vote to leave the EU.

Data has also shown strong shop sales last month.

The BBA says there were 168.1mil­lion credit card trans­ac­tions last month, com­pared with 156.8mil­lion in July 2015.

The rise left credit card hold­ers owing a record £42.6bn.

Ex­perts worry that the bor­row­ing binge, fu­elled by record low in­ter­est rates, is stor­ing up prob­lems for the fu­ture.

Joanna El­son, chief ex­ec­u­tive of the Money Ad­vice Trust, which runs Na­tional Debtline, said: “Most peo­ple will be able to han­dle this ex­tra bor­row­ing but we are con­cerned that a mi­nor­ity of house­holds risk be­ing left fur­ther ex­posed to fi­nan­cial dif­fi­culty if the econ­omy does suf­fer in the longer term.”

While credit card lend­ing rose, the amount of new debt taken on through per­sonal loans and bank over­drafts dipped last month.

Econ­o­mist Howard Archer said: “We sus­pect that the fun­da­men­tals for con­sumers will be­come less favourable, with pur­chas­ing power likely di­min­ish­ing and the labour mar­ket soft­en­ing.”

Mean­while, the BBA data showed mort­gage lend­ing slumped to an 18-month low in the wake of the Brexit vote. Banks handed out 37,700 home loans last month, 5.3% fewer than in June and down al­most 19% year on year.

Sa­muel Tombs, of Pan­theon Macroe­co­nomics, said: “July’s mort­gage ap­provals data brings clear ev­i­dence that the Brexit vote has made house­holds re­luc­tant to un­der­take ma­jor fi­nan­cial com­mit­ments.”

Oth­ers believe the drop was caused by a stamp duty rise in April.

Ex­perts reckon prop­erty prices will fall, but other data sug­gests many firms have shrugged off con­cerns over Brexit.

BUSY Shop sales re­mained strong last month

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