Are We Borrowing Less on Brexit Fears?
There are times of the year, and times in our lives, when we seem to tend to borrow more than usual; not in the amounts we borrow, but in the number of loans as consumers we take out.
Near Christmas is one time of year that many opt to take out a loan to help fund the Christmas holiday.
Then there is in the summer, when many families will take out a loan to complete or wholly fund a holiday.
These are times of the year that there can be a spike in the number of consumers taking out loans.
Then there are times in our lives, that we need to turn to borrowing to fund and complete them, a university degree we may take out student loans, to buy a property we may require a mortgage, and maybe a car loan to finance a car.
Even the use of credit cards as borrowing can see trends in when they are used.
So with all that influences when and how we borrow, is Brexit influencing our borrowing habits as consumers?
We know that the Brexit may or has been impacting the cost of some foods, the value of the Pound has dropped, and also that there are businesses leaving the UK due to Brexit, so they can continue to trade in the EU.
It is also feared that many businesses may not be ready for the Brexit, leaving some wondering and confused.
So it would seem to follow logic that the Brexit may also influence us as borrowers, and may influence us to borrow less.
If we are to believe the figures and statistics, then yes, we are borrowing less, and this is thought to be based on fears of the Brexit. Actually it is fear of the unknown, we don’t really know what will happen.
Deal…no deal…what happens???
All this can effect our behaviours, consciously or not, and borrowing may be one way we are affected.
A quick search shows that we are borrowing less, and that banks are “bracing” for this reduction.
Depending on where you look or whom you ask, credit cards are being used less, down at it lowest since 2014.
So what does this mean for now and the future?
One can only speculate based on historical events, and educated guesses.
If banks and lenders want to lend more money, they can simply lower interest rates, and make credit easier to access. Credit card companies can offer unsolicited credit limit increases, and banks can open the vaults as they say.
The one downside to this is the pendulum swinging the other way at some point.
If you remember there is a price to pay for easy and cheap credit, it is called a “credit crunch”.
Unfortunately there is no crystal ball to predict what may or may not occur.
There is uncertainty in immigration as to when “free movement” ends in the UK for EU nationals, uncertainty with food prices and importing items from the EU to the UK, and this list goes on and on.
Borrowing money is just another box to be ticked on the list.