Financial services set to ease as lending cools
The UK’S financial services sector is bracing for a slowdown as choppy economic conditions apply the brakes to mortgage and business lending, research published today has found.
The stock of mortgage lending is expected to ease back to £1,184 billion next year, down from £1,192bn in 2017, according to influential think tank EY Item Club.
Mortgage demand will be impacted by the inflationary squeeze on household finances, but stocks will pick up to £1,196bn and £1,226bn in 2019 and 2020 respectively, the organisation said.
Business lending is also expected to suffer, falling from £425bn this year to £424bn in 2018, before returning to growth in 2019 at £427bn and stepping up again to £435bn by the end of the decade.
However, Omar Ali, EY’S UK financial services managing partner, said the growth swing for both areas would depend on Britain striking a transitional deal during its divorce talks with the EU. EY Item Club expects inflation to peak at 3 per cent this year.