Due to the rising cost of living in the UK, it was reported that the total of consumer loan applications by consumers in June this year reached £ 1.7 billion.
In the statement made by the Bank of England (BoE), it was noted that the loan amount in question was at its highest level since April 2018.
Analysts’ expectation in the country was that consumer loans would be realized at the level of 1.3 billion pounds in June of this year.
In the statement made by the BoE, it was pointed out that consumers’ credit card spending was approximately 600 million pounds in June this year.
In the statement of the central bank, it was stated that the average interest rate that banks apply to consumers’ deposit accounts increased to 4.29 from 3.95 in June this year.
“The cost of living forced households to rely on credit”
Commenting on the bank’s data, Richard Lane, Director of External Affairs, Non-Governmental Organization Step Change, which provides financial advisory services to consumers in debt crisis, said, “In an environment where the cost of living is increasing in the UK, households will increasingly have to rely on consumer loans to meet their daily expenses.” used.
Victor Trokoudes, CEO of banking phone application Plum, said, “We are witnessing that consumers who had savings during the epidemic had to use their savings and then faced with applying for consumer loans.”
The BoE increased its policy rate by 50 basis points from 4.50 percent to 5 percent after inflation remained sticky at 8.7 percent in May.
Markets expect the Bank of England to raise the policy rate from 5 percent to 5.25 percent, the highest level in the last 15 years.