(Bloomberg) -- U.K. consumers have grown more enthusiastic about spending big as credit continues to expand, according to GfK.
A score of consumers' willingness to make major purchases increased by two points and a measure of personal financial situations over the last year improved in October, the research firm said on Tuesday. The overall confidence index slipped one point to minus 10 because of a drop in sentiment about the general economic situation.
Consumers have been piling on debt, dismissing Bank of England warnings of financial risk. Separate figures published by the central bank this week showed that consumer credit growth has expanded at around 10 percent annually in recent months, and credit-card lending has increased to the fastest since April.
The BOE is likely to raise its benchmark rate for the first time in over a decade on Thursday, which may inject more caution into decisions about borrowing.
“Surging credit-card use is fueling spending at the expense of our appetite for saving, which is growing at the slowest rate since the 2008-2009 financial crisis,” said Joe Staton, head of market dynamics at GfK. “Our enthusiasm for spending, as witnessed by the uptick in the Major Purchase Index, is more worrying than reassuring.”
A separate report by Lloyds showed business confidence improved in October, signaling moderate economic growth, though measures of business prospects and economic optimism remain below their long-term averages.
To contact the reporter on this story: Jill Ward in London at jward98@bloomberg.net.
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brian Swint, Jana Randow
©2017 Bloomberg L.P.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
