UK Consumer Credit Market Outlook: Q1 2010
http://www.reportsandreports.com/market-reports/uk-consumer-credit-market-outlook-q1-2010/
Introduction
This latest edition of
Datamonitor's quarterly outlook series provides updated estimates for
the performance of the consumer credit market from 2010 to 2014. It also
considers the behavior of different players such as lenders and
borrowers in the context of recent developments in the market.
Scope
- Provides the latest market sizing data for the UK consumer credit market.
- Estimates the performance of different consumer credit products - unsecured personal loans, credit cards, overdrafts, retail and motor finance.
- Gives Datamonitor's scenario for the consumer credit market from 2010 to 2014 and two additional optimistic and pessimistic scenarios.
- Includes a complementary interactive Excel model, presenting all of the data in an easily accessible format.
The first quarter of 2010 saw a second consecutive period of growth in terms of lending in the consumer credit market. Growth was bolstered by an improvement in lines such as unsecured personal loans and motor finance.
Write-offs appear to have peaked in both the credit card and unsecured personal loan lines. They had remained steady earlier in 2009 before rising sharply towards the end of the year.
A mixed economic picture suggests that the consumer credit market will have to wait until 2011 before seeing a sustained recovery. Credit card and unsecured personal loans are likely to recover more quickly as the recovery begins while the recovery in motor finance will remain slow.
Reasons to Purchase
- Review the overall performance of the market in Q1 2010 and use it to benchmark your own performance.
- Use Datamonitor's market forecasts to help build your future strategy with confidence.
- Gain an understanding of how the borrowers and lenders are behaving under the prevailing economic conditions.
Table Of contents
DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
The first quarter of 2010 saw a mild increase in consumer credit gross lending 2
Gross advances in Q1 2010 were almost on a par with their Q1 2009 level 2
Motor finance was the best performing consumer credit product in terms of year-on-year growth 4
Unsecured personal loans saw the largest year-on-year fall in balances outstanding 6
Different players in the economy will have a significant impact on future performance in the market 9
The government's attempts to cut the fiscal deficit are likely to have a significant impact on growth 9
Lenders remain wary of overextending themselves in the tough economic conditions 10
Write offs peaked in both credit card and unsecured personal loans towards the end of 2009 10
Consumers are taking measures to cope with their debts although they may be storing up future difficulties 11
Datamonitor expects a tough year in 2010 but a solid performance in 2011 12
Datamonitor's forecasting model explained 12
GDP will show a moderate improvement in 2010 before picking up in 2011 12
Unemployment will level out sooner than was previously expected 12
The Bank of England is unlikely to make changes to its monetary policy in 2010 13
Retail sales and car purchases forged ahead in early 2010 13
House price growth has stalled 13
The Datamonitor scenario anticipates a decline in gross lending in 2010 with an improvement in 2011 14
Datamonitor considers two other scenarios for the consumer credit market until 2014 16
The pessimistic scenario assumes a mild double dip recession and a slower recovery 16
The optimistic scenario assumes that the economic recovery will be strong 17
The coalition government is looking to introduce new measures to the consumer credit market to aid consumers 18
The coalition government is seeking to make it harder for unsecured debt to be turned into secured debt 18
The coalition intends to reduce 'unfair' fees and charges 18
A Consumer Credit Counselling Service scheme has been introduced to give borrowers time to sort out their finances 19
APPENDIX 20
Supplementary data 20
Definitions 21
Bank of England base rate 21
Balances outstanding 21
CAGR 21
CCJ 21
Consumer credit 21
Gross advances 21
OFT 22
Overdraft 22
Methodology 22
Forecasting methodology 22
Choice of economic variables 22
Model outputs 23
Bespoke scenario-based forecasting 23
Further reading 23
Ask the analyst 23
Datamonitor consulting 23
Disclaimer 23
List of Tables
Table 1: Quarterly total consumer credit gross advances and balances outstanding in the UK, Q1 2008-Q1 2010 3
Table 2: UK consumer credit gross advances by product (£m), Q1 2008-Q1 2010 6
Table 3: UK consumer credit balances outstanding by product (£m), Q1 2008-Q1 2010 8
Table 4: Datamonitor's updated macroeconomic variables for 2009-14f: Datamonitor scenario 14
Table 5: Updated Datamonitor view: consumer credit forecast by product line (£ billion), 2009-14f 16
Table 6: Datamonitor's updated pessimistic consumer credit forecast by product line (£ billion), 2009-14f 17
Table 7: Datamonitor's updated optimistic consumer credit forecast by product line (£ billion), 2009-14f 18
Table 8: Credit card and unsecured personal loan write offs, Q1 2008-Q1 2010 20
Table 9: Datamonitor's updated macroeconomic variables for 2009-14f: pessimistic scenario 20
Table 10: Datamonitor's updated macroeconomic variables for 2009-14f: optimistic scenario 21
List of Figures
Figure 1: Year-on-year gross lending has picked up over the last two quarters while balances outstanding have declined 3
Figure 2: Motor finance saw the strongest year-on-year growth in Q1 2010 5
Figure 3: Unsecured personal loans saw the largest fall in balances outstanding while credit cards saw the biggest increase in Q1 2010 7
Figure 4: Write offs for both products appear to have peaked in late 2009 but remain elevated for credit cards 11
DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
The first quarter of 2010 saw a mild increase in consumer credit gross lending 2
Gross advances in Q1 2010 were almost on a par with their Q1 2009 level 2
Motor finance was the best performing consumer credit product in terms of year-on-year growth 4
Unsecured personal loans saw the largest year-on-year fall in balances outstanding 6
Different players in the economy will have a significant impact on future performance in the market 9
The government's attempts to cut the fiscal deficit are likely to have a significant impact on growth 9
Lenders remain wary of overextending themselves in the tough economic conditions 10
Write offs peaked in both credit card and unsecured personal loans towards the end of 2009 10
Consumers are taking measures to cope with their debts although they may be storing up future difficulties 11
Datamonitor expects a tough year in 2010 but a solid performance in 2011 12
Datamonitor's forecasting model explained 12
GDP will show a moderate improvement in 2010 before picking up in 2011 12
Unemployment will level out sooner than was previously expected 12
The Bank of England is unlikely to make changes to its monetary policy in 2010 13
Retail sales and car purchases forged ahead in early 2010 13
House price growth has stalled 13
The Datamonitor scenario anticipates a decline in gross lending in 2010 with an improvement in 2011 14
Datamonitor considers two other scenarios for the consumer credit market until 2014 16
The pessimistic scenario assumes a mild double dip recession and a slower recovery 16
The optimistic scenario assumes that the economic recovery will be strong 17
The coalition government is looking to introduce new measures to the consumer credit market to aid consumers 18
The coalition government is seeking to make it harder for unsecured debt to be turned into secured debt 18
The coalition intends to reduce 'unfair' fees and charges 18
A Consumer Credit Counselling Service scheme has been introduced to give borrowers time to sort out their finances 19
APPENDIX 20
Supplementary data 20
Definitions 21
Bank of England base rate 21
Balances outstanding 21
CAGR 21
CCJ 21
Consumer credit 21
Gross advances 21
OFT 22
Overdraft 22
Methodology 22
Forecasting methodology 22
Choice of economic variables 22
Model outputs 23
Bespoke scenario-based forecasting 23
Further reading 23
Ask the analyst 23
Datamonitor consulting 23
Disclaimer 23
List of Tables
Table 1: Quarterly total consumer credit gross advances and balances outstanding in the UK, Q1 2008-Q1 2010 3
Table 2: UK consumer credit gross advances by product (£m), Q1 2008-Q1 2010 6
Table 3: UK consumer credit balances outstanding by product (£m), Q1 2008-Q1 2010 8
Table 4: Datamonitor's updated macroeconomic variables for 2009-14f: Datamonitor scenario 14
Table 5: Updated Datamonitor view: consumer credit forecast by product line (£ billion), 2009-14f 16
Table 6: Datamonitor's updated pessimistic consumer credit forecast by product line (£ billion), 2009-14f 17
Table 7: Datamonitor's updated optimistic consumer credit forecast by product line (£ billion), 2009-14f 18
Table 8: Credit card and unsecured personal loan write offs, Q1 2008-Q1 2010 20
Table 9: Datamonitor's updated macroeconomic variables for 2009-14f: pessimistic scenario 20
Table 10: Datamonitor's updated macroeconomic variables for 2009-14f: optimistic scenario 21
List of Figures
Figure 1: Year-on-year gross lending has picked up over the last two quarters while balances outstanding have declined 3
Figure 2: Motor finance saw the strongest year-on-year growth in Q1 2010 5
Figure 3: Unsecured personal loans saw the largest fall in balances outstanding while credit cards saw the biggest increase in Q1 2010 7
Figure 4: Write offs for both products appear to have peaked in late 2009 but remain elevated for credit cards 11
