UK Consumer credit falls, but confidence rising

Net consumer credit in the UK was flat last month falling below analysts’ expectations.

April credit was £1.19 billion, down from March’s revised figure of £1.31 billion. Analysts had expected April’s result to be similar to March.

Within this, April credit card lending plunged 26% to £326 million. Mortgage lending also declined to £3.3 billion from £4.05 billion in March.

The M4 money supply growth, a key figure in the Bank of England’s determination of interest rates, was unchanged at 4.8% on the year. M4 has been accelerating over the past 6 months, though may have reached a peak last month at 5%. April’s month-on-month M4 figure was revised down to 0.6%.

But the signs for future inflation are still mixed. A separate survey by GfK Great Britain shows May consumer confidence balance has risen more than the usual four points to +2 from –4. GfK cited the steady interest rate environment for the rise. The balance of consumers now ready to make a major purchase also rose 13 points to +21.