According to data gathered by LearnBonds.com, credit card lending to individuals in the United Kingdom (UK) reached £54.16 billion in Q3 2019. This represents the 13th consecutive quarter with growth in the gross lending value on credit cards to individuals in the UK.
Credit card lending in the UK economy is growing for individuals. Since the second quarter of 2016, the lending value on credit cards to individuals in the UK has been growing without stopping. In the last quarter, it grew by just 0.018% compared to the second quarter of 2019.
At the beginning of the current year, the lending value to individuals in the United Kingdom was €53.31 billion meaning that throughout the year it has already expanded by 1.594%. It is also possible to see that the expansion of this market has almost paused.
It will be certainly important to understand how this will be affecting the UK economy considering credit is an important part of it. The European economy has been slowing down and uncertainty about Brexit has also affected the evolution of the UK market.
Nonetheless, since the first quarter of 2014, the initial period in which data was being collected, the loans to individuals in the market have already expanded 38.05% from £39.23 billion to the current £54.16 billion. 2015 was a very important year considering that it was the time in which the market experienced the largest changes. From the last quarter of 2014 to the first quarter of 2015, lending to individuals grew by 8.79% from €39.35 billion to €42.81 billion.
The Bank of England informed which was the gross lending value on credit cards to individuals in the country, which is an important part of the economy but certainly not the only one. It will also be important to follow the results of the lending value for companies in the industrial and services sectors to have a better idea of which could be the impact on the economy. However, the result shows an expansion in the third quarter of this year, which is much more positive than a net decrease.
At the same time, interest rates in the UK remain at 0.75%, close to the minimum values they have ever had. This has also helped credit card providers to lower the interest users have to pay for their debts. In general, the whole European continent is now experiencing low-interest rates due to low inflation growth and worries the economy could remain stagnant in the coming years.
If interest rates remain at these levels or lower, credit could continue growing and pushing the economy forward. If the Bank of England decides to increase interest rates, credit could fall and affect the whole economy.