Economic Insights – June 2018

This is the first in our new series of economic overviews, designed to provide a snapshot of some of the key economic-data statistics, including house-buying data and personal-loan rates. All of these help to shape consumer confidence and we hope will enable you to adapt your marketing to sell more cars and to make the most of the undoubted opportunity to use finance in that marketing.

 

As at 26/06/18

This report is our latest support-initiative, designed to help you and is just part of a wide package of services, which means that as a lender with full broker capabilities and with arguably the widest, most experienced field-sales-team in the business we can provide an unrivalled range of support to help you to sell more vehicles.

Key Economic Data Summary as at 26/06­­­­­­/18

CPI (May) +2.4%
CPIH (May) +2.3%
Employment Rate (Feb ’18 to April ’18) 75.6%
Unemployment Rate (Feb’18 to April ‘18) 4.2%
GDP Growth/Shrinkage Q1 2018 +0.1%
BoE Base Rate 0.5%
LIBOR (6M GBP) 0.78488
Crude Oil $68.098
Gold $1,258.60

Personal Loan Rates

Please note the following unsecured personal loan rates were sourced from lenders websites on 26/06/18 – Based upon a £5,000 loan over 36 months and subject to underwriting. The Representative APR is the rate at or below which the advertiser reasonably expects that credit would be provided under at least 51% of the agreements entered into as a result of the financial promotion. Note some rates may only be available to current customers.

Lenders £5K Representative APR
Sainsbury’s Finance 3.7%
Tesco Personal Finance 3.5%
Santander UK 4.5%
Nat West/RBS 6.9%
M & S 3.6%
Halifax 11.9%
HSBC 6.1%
Lloyds Bank 14.5%
TSB Bank 9.9%
Barclays Bank 10.5%
Clydesdale Bank/Yorkshire Bank 3.9%

National House Price Index (published by Lloyds Bank plc (Lloyds) on behalf of IHS Markit) as at (06/06/18)

Annual Change +1.9%
Quarterly Change +0.2%
Monthly change +1.5%
Average Price £224.439

House Price News (source Halifax Banking Group as at (06/06/18)

  • Home sales over 100,000 in April. UK home sales grew by a healthy 4% from 96,800 in March to 100,190 in April. In the three months to April sales were 1.6% lower than in the preceding three months. This weakness reflects the sharp slowdown seen in mortgage approvals at the end of last year. (Source: HMRC, seasonally-adjusted figures)
  • Housing market activity softens in March. Bank of England industry-wide figures show that the number of mortgages approved to finance house purchases – a leading indicator of completed house sales – were 62,455 in April. This was a 0.6% month-on-month decline – marking the third consecutive month in which approvals have fallen. In the three months to April approvals were 1.9% lower than in the preceding three months, continuing to indicate a subdued residential market. (Source: Bank of England, seasonally-adjusted figures)
  • Decline in housing activity eases in April. After four straight months of sharp decline, new buyer enquiries stabilised in April. That said, demand fell for the 13th month in a row. Supply continues to remain tight with new instructions falling for the 26th consecutive month in April; however, the pace has slowed markedly. Agreed sales also held relatively steady over the month. (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report)
  • The average price of a flat in the UK has risen by £75,074 over the last five years, from £157,061 in 2013 to £232,135 in 2018. Flats now account for 15% of all home sales. Although six in every ten property sales last year were either terraced or semi-detached properties, flats have increased in value by 48%, compared to 39% for all property types over the same period. Terraced homes have seen average prices rise by £60,482 since 2013, while detached homes recorded an increase of £73,638. Although flats have recorded greater price gains over the past five years, semi-detached and terraced homes have remained the most popular choices for homebuyers.

Economic News

Household Finance Update May 2018 – UK Finance

  • Estimated gross mortgage lending for the total market in May is £22.2bn, 8.8% higher than a year earlier.
  • The number of mortgage approvals by the main high-street banks in May also rose, increasing by 3 per cent compared to the same month a year earlier.  As in April, increased approval numbers were driven by re-mortgaging, some 18% more than a year earlier.  In contrast, approvals for house purchases were 3.8% lower than the same period a year earlier.
  • Credit card spending was 2.3% higher than a year earlier, with outstanding levels of card borrowing having grown by 5.7% over the year.  The total of 193 million credit card purchases in May was well above the previous 12 month average of 181 million, reflecting increased retail sales.  Outstanding overdraft borrowing was 3.9% lower compared to the same time last year.
  • Personal deposits grew by 1.6% in the last 12 months, although this was a lower annual rate than seen historically.  Deposits held in instant access accounts were 4.4% higher than a year earlier.

Business & Economic News

31/05/18 – GfK – The GfK consumer confidence index in the UK climbed two points from the previous month to -7 in May 2018, compared to market expectations of -8.

26/06/18 – SMMT – investment in Britain’s car industry has fallen by half, according to figures from The Society of Motor Manufacturers & Traders (SMMT). In the first six months of 2017, investment in new models and factory improvements stood at £647.4m. This year, the figure had fallen to £347.3m for the same period.

21/06/18 – Bank of England – The Bank of England voted to hold interest rates in the June meeting of the Monetary Policy Committee, with the nine-member committee split 6-3 in favour of holding rates, the move by members towards a rate rise has created speculation that interest rates may rise in August with signs that the economy might be improving.

Sources

ONS:

http://www.oil-price.net

https://goldprice.org

http://www.global-rates.com/interest-rates/libor/libor.aspx

https://www.halifax.co.uk/media-centre/house-price-index/

https://www.smmt.co.uk/2018/06/uk-automotive-industry-urges-rethink-on-brexit-red-lines-as-uncertainty-bites/

https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2018/june-2018

https://www.gfk.com/en-gb/insights/press-release/uk-consumer-confidence-rises-two-points-to-7-in-may/

https://www.ukfinance.org.uk/household-finance-update-may-2018/

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