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Synopsis
Consumer credit has shown consistent signs of growth since 2014 – the stock of lending has decreased only once in the year, and a half from then to June 2015 – for the first time since before the financial crisis. This is due to the recovery of consumer confidence, with the consumer confidence index recording its first positive number since the financial crisis in August 2014, and has been positive for every month since, up to June 2015.

Summary
- Consumer credit strengthening since the start of 2014, as economic recovery gains momentum

- Consumer credit has shown consistent signs of growth since 2014 – the stock of lending has decreased only once in the year and a half from then to June 2015 – for the first time since before the financial crisis. This is due to the recovery of consumer confidence, with the consumer confidence index recording its first positive number since the financial crisis in August 2014, and has been positive for every month since, up to June 2015. The demand for, and availability of, credit increased since the second quarter of 2014, and has also been a key factor.

- Record-low interest rates on personal loans driving other loans and advancements category

- HSBC became the first lender to break the 5% interest rate barrier for its GBP7,500–15,000 personal loan in September 2014, triggering a price war between mainstream lenders, as each bank or building society tried to get to the top of the comparison tables. This has shown no sign of abating in the 10 months since, with Sainsbury’s offering rates as low as 3.5% in August 2015.

- This means that lending is cheaper than ever for consumers, which has unsurprisingly given the industry a boost. The personal loan category was hit harder than any other in the aftermath of the financial crisis, and the stock of personal loans remains over GBP30.0 billion below its January 2008 total, so there is still ample room for recovery.

- Central bank rate at remains at 0.5%; rise no longer imminent, but still set for mid-2016

- The Bank of England’s (BoE) base rate has been at a record low since March 2009, at 0.5%, meaning that financial institutions have had much cheaper access to credit. This rate looks set to rise in the second quarter of 2016, however, according the Office for Budget Responsibility’s (OBR) economic forecasts. This had been expected sooner, but record low inflation and weaker global growth looks set to delay the increase by at least a quarter.

- This will cause the cost of credit to rise, as banks will have to pay more for funds. Increases will be steady, however, and the first rise will only be to a maximum of 0.75%, meaning any setback to the industry should be minor.
Retail sales soar as consumers increasingly buy higher-value products

- Total retail sales have nearly matched their entire 2014 total during the first six months of 2015, as extraordinary annual growth looks inevitable. This trend is matched in the higher-value categories of retail; both the electronics and computer categories are close to matching their 2014 annual totals. This has undoubtedly been driven by a surge in consumer confidence – as shown in the previously mentioned index – caused by an increase in real wages. Real wages had been in decline for much of the review period, but an increase in wages from the start of 2014 combined with record-low inflation in 2015 reversed this trend from the end of 2014. Clothing, food, oil and air fares have been among the categories that have significantly fallen in price so far in 2015, which has allowed consumers to spend more money on other items.

- Motor finance continues to record extraordinary growth

- Motor finance is the only typical form of consumer credit that has recorded substantial growth for a prolonged period. Both the number of new cars bought from dealerships and the value of advances paid on new cars have grown monthly (on the previous year) consistently staying at above 20% since the beginning of 2012. The value of new cars has grown every single month since June 2011, while the value of used cars bought last declined in June 2012; unprecedented growth compared to the rest of the market during this period.

Scope
- This report provides market analysis, information and insights into the UK consumer credit industry

- It provides a breakdown of the types of unsecured loans offered in the UK

- It analyses drivers and the outlook for the market

- It provides information on the main banks in the UK market

- It covers News and regulatory developments

- It forecasts the future of the consumer credit industry in the UK over the next five years

Reasons To Buy
- Gain an understanding of the UK consumer credit industry.

- Access monthly and annual statistics on every aspect of the UK consumer credit market, both in written form and in graphs and tables.

- Read analysis of the relevant market statistics, outlining what has been happening in the consumer credit market, why it has been happening and what to expect over the coming years.

- Read about economic factors impacting the UK consumer credit market

- Read about how individual banks and building societies are affecting the market, in terms of market shares and innovations.

Key Highlights
The stock of outstanding consumer credit stabilized throughout 2013 and grew consistently during 2014, where it recorded a positive growth rate for all 12 months. Total outstanding lending fell from GBP172.5 billion to GBP168.8 billion from 2010–2014, with the most substantial decline coming in 2011.

Table Of Contents

Consumer Credit in the UK - Key Trends and Opportunities to 2019
Table of Contents
1 Executive Summary
2 Introduction
2.1 What is this Report About?
2.2 Definitions
2.3 Methodology
3 Market Analysis
3.1 Market Size
3.1.1 Total Stock of Lending
3.1.2 Total Gross Lending
3.1.3 Total Net Lending
3.2 Lending by Institution
3.2.1 Lending from MFIs
3.2.1.1 Stock of Lending from MFIs
3.2.1.2 Gross Lending from MFIs
3.2.1.3 Net Lending from MFIs
3.2.2 Lending from Other Sources
3.2.2.1 Stock of Lending from Other Sources
3.2.2.2 Regulatory Changes
3.2.2.3 Net Lending from other consumer credit lenders
3.3 Lending by Type of Credit
3.3.1 Credit Cards
3.3.1.1 Stock of Lending
3.3.1.2 Credit Card Gross Lending
3.3.1.3 Net Lending on Credit Cards
3.3.1.4 Credit Card Activity
3.3.1.5 UK Bank Write offs
3.3.1.6 Interest Rates on Credit Cards
3.3.2 Other Loans and Advances
3.3.2.1 Stock of Lending
3.3.2.2 Gross Lending
3.3.2.3 Net Lending on other forms of consumer credit
3.3.2.4 Other loans and advances
3.3.2.5 Overdrafts
4 Consumers
4.1 Consumer Confidence
4.2 Demand for and Availability of Credit
4.2.1 Demand
4.2.2 Availability
4.3 Economic Climate
4.3.1 Interest Rates
4.3.2 Energy Bills
4.3.3 Source of debt
4.4 Retail Sales
4.5 Lending to Underbanked, Unbanked and Sub-Prime Customers
4.5.1 Unbanked Customers
5 Market Outlook
6 Competitive Landscape
7 Regulation and Policy
7.1 Regulators
7.1.1 Financial Conduct Authority (FCA)
7.1.2 Prudential Regulation Authority (PRA)
7.1.3 Monetary Policy Committee (MPC)
7.1.4 Treasury Committee
7.1.5 Competitions and Markets Authority (CMA)
8 UK Bank Profiles
8.1 Santander UK Plc
8.2 Lloyds Banking Group
8.3 Barclays Plc
8.4 Royal Bank of Scotland Group Plc
8.5 HSBC Bank Plc
9 Personal Loans Offered
9.1 Santander UK Plc
9.2 Royal Bank of Scotland Group Plc
9.3 HSBC Bank Plc
9.4 Barclays Plc
9.5 Lloyds Banking Group
9.6 Nationwide Building Society
10 Statistics
10.1 Review Period
10.2 Forecast Period
11 News
12 Appendix
12.1 Methodology
12.2 Contact Timetric
12.3 About Timetric
12.4 Timetric's Services
12.5 Disclaimer

List of Tables
Table 1: The UK - Consumer Credit Market (GBP Billion), 2009-2014
Table 2: The UK - Consumer Credit Lending (GBP Million), 2015-2019

List of Figures
Figure 1: UK - Outstanding Consumer Credit, 2010-2015
Figure 2: UK - Consumer Credit Gross Lending, (GBP Million) 2010-2015
Figure 3: UK - Annual Consumer Credit Gross Lending (GBP Million), 2009-2014
Figure 4: UK - Total Gross Lending and Repayments, GBP Million: 2013-2015
Figure 5: UK - Total Net Consumer Credit Lending, GBP Million: 2013-2015
Figure 6: UK - Outstanding Consumer Credit from MFIs (GBP Million), 2010-2015
Figure 7: UK - Consumer Credit Gross Lending from MFIs (GBP Million), 2010-2015
Figure 8: UK - MFI - Gross Lending and Repayments: 2013-2015
Figure 9: UK - MFI Net Consumer Credit Lending: 2013-2015
Figure 10: UK - Outstanding Consumer Credit from Other Sources (GBP Million), 2010-2015
Figure 11: UK - Annual Consumer Credit Gross Lending from Other Sources (GBP Million), 2010-2015
Figure 12: UK - Other Consumer Credit Lenders - Gross Lending and Repayments: 2013-2015
Figure 13: UK - Other Consumer Credit Lenders - Net Consumer Credit Lending: 2013-2015
Figure 14: UK - Outstanding Consumer Credit, Credit Card Loans (GBP Million), 2010-2015
Figure 15: UK - Annual Outstanding Consumer Credit, Credit Card Loans (GBP Million), 2010-2015
Figure 16: UK - Credit Card Gross Lending (GBP Million), 2010-2015
Figure 17: UK - Annual Credit Card Gross Lending (GBP Million), 2009-2014
Figure 18: UK - Credit Cards - Gross Lending and Repayments: 2013-2015
Figure 19: UK - Net Credit Card Lending: 2013-2015
Figure 20: UK - Value of Credit Card Purchases (GBP Million), 2009-2014
Figure 21: UK - Number of Credit Card Purchases (Million), 2009-2014
Figure 22: UK - Number and Value of Credit Card Purchases (GBP Million), 2010-2015
Figure 23: UK - Write-Off Growth Rates on Credit Card lending from Banks: 2009-2015
Figure 24: UK - Interest Rates on Credit Card Loans: 2009-2015
Figure 25: UK - Stock of Consumer Credit from Other Loans and Advances, Monthly: 2010-2015
Figure 26: UK - Annual Stock of Other Loans and Advances: 2010-2015
Figure 27: UK - Other Loans and Advances, Gross Lending, Monthly: 2010-2015
Figure 28: UK - Annual Other Loans and Advances, Gross Lending, 2009-2014
Figure 29: UK - Other Loans and Advances - Gross Lending and Repayments (GBP million): 2013-2015
Figure 30: UK - Other Loans and Advances - Net Consumer Credit Lending (GBP Million): 2013-2015
Figure 31: UK - Overdraft Lending, Monthly Amounts Outstanding (GBP Million), 2009-2015
Figure 32: UK - Overdraft Lending, Annual Amounts Outstanding (GBP Million), 2009-2015
Figure 33: UK - Interest Rates On UK Overdrafts (%), 2009-2015
Figure 34: UK - Revenue From Arranged and Unarranged Overdraft Charges (GBP Million), 2011-2013
Figure 35: UK - Personal Loans, Outstanding Amount (GBP Million), 2011-2015
Figure 36: UK - Personal Loans, Gross Lending (GBP Million), 2009-2015
Figure 37: UK - Interest Rates on Personal Loans 2009-2015
Figure 38: UK - Motor Finance Dealership Lending, New Cars - Value of Advances and Percentage Change on Previous Year: 2011-2015
Figure 39: UK - Motor Finance Dealership Lending, New Cars - Number of Cars bought and Percentage Change on Previous Year: 2011-2015
Figure 40: UK - Motor Finance Dealership Lending, Used Cars - Value of Advances and Percentage Change on Previous Year: 2011-2015
Figure 41: UK - Motor Finance Dealership Lending, Used Cars - Number of Cars bought and Percentage Change on Previous Year: 2011-2015
Figure 42: UK - Student Loans, Overall Amount Awarded (GBP Million), 2010-2014
Figure 43: UK - Paydays Loans, Percentage of Revenue of Loans Rolled Over or Refinanced, 2012
Figure 44: UK - Payday Loans, Percentage of Loans Rolled Over or Refinanced, 2012
Figure 45: UK - GfK Consumer Confidence Index, 2012-2015
Figure 46: UK - How has Demand for Total Unsecured Credit from Households Changed: 2007-2015
Figure 47: UK - How has Availability for Total Unsecured Credit for Households Changed: 2007-2015
Figure 48: UK - Lending, Salaries, Inflation and Annual Increases (%), 2011-2015
Figure 49: UK - CPI Monthly Inflation Rate (%), 2009-2014
Figure 50: UK BoE Official Bank Rate (%), 2004-2015
Figure 51: UK Annual Gas and Electricity Bills: 2004-2014
Figure 52: UK Source of Debt: 2013
Figure 53: UK - Total Retail Sales, Monthly (GBP Billion), 2010-2015
Figure 54: UK - Spending on Higher-Value Items, Monthly (GBP Billion), 2010-2015
Figure 55: UK - Spending on Higher-Value Items, Annually (GBP Billion), 2010-2015
Figure 56: Total Consumer Credit: Outstanding Balances Forecast: 2015-2019
Figure 57: Total Gross Consumer Credit Lending: Forecast: 2015-2019
Figure 58: Credit Card Lending: Outstanding Balances Forecast: 2015-2019
Figure 59: Other Loans and Advancements Lending: Outstanding Balances Forecast: 2015-2019
Figure 60: UK Credit Card Market Shares: 2014
Figure 61: UK Personal Loan Outstanding Balances: Market Shares: 2013
Figure 62: UK Banking Regulatory Framework, 2014

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