Q1 2007 data shows that the UK consumer credit market continues to struggle
Following a poor performance in 2006, the consumer credit market continued to underperform in Q1 2007
Most product lines continued to struggle in the first quarter of 2007
Higher interest rates and tight lending criteria adversely impacted on the market in Q1 2007
The base rate was increased further in 2007 to curb Inflationary pressures
Lenders remain conservative with regards to lending criteria
Datamonitor forecasts a difficult market ahead, particularly in 2007
Datamonitor’s forecasting model explained
Datamonitor’s macroeconomic forecasts have remained broadly stable
Under a marginally improved economic view, Datamonitor has adjusted its consumer credit forecasts slightly
A number of competitor and regulatory activities took place in Q1 2007
Citigroup has acquired Egg, but it is a risky move considering the bank’s losses in recent years
Lloyds TSB and Barclaycard introduced fees for dormant credit card accounts
The Competition Commission published its final report on the current account market in Northern Ireland
APPENDIX
Supplementary data
Definitions
Bank of England base rate
Balances outstanding
CAGR
CCJ
Consumer credit
Gross advances
IVAs (Individual Voluntary Arrangements)
OFT
Overdraft
Methodology
Forecasting methodology
Choice of economic variables
Model outputs
Bespoke scenario based forecasting
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer
Abstract
The poor performance of the UK consumer credit market in 2005 and 2006 continued into Q1 2007, as the market continued to be affected by a weaker labor market, high household debt and low consumer confidence. What can lenders expect over the next few years?
Provides the latest marking sizing figures for the UK consumer credit market by product line and analyses industry trends in Q1 2007.
Covers unsecured personal loans, credit cards, motor finance, retail finance (store cards, installment credit and mail order credit) and overdrafts.
Details Datamonitor's latest scenario based forecasts for the future of the consumer credit market in an accompanying interactive Excel model.
The poor performance of the consumer credit market in 2005 and 2006 carried into Q1 2007, as consumers continued to be affected by a weaker labor market, high household debt and low consumer confidence.
High household debt and higher interest rates have slowed down spending, along with lenders maintaining their tightened lending criteria.
Datamonitor's forecasts for the UK consumer credit market have changed only very slightly from the previous quarter. Most product lines will continue to perform poorly over the next two years in particular.
Review market performance in Q1 2007 to place your performance in context to the market's.
View the latest independent quarterly and annual forecasts for the UK consumer credit market to plan your future strategy with confidence.
Understand the key challenges facing lenders in 2007 and the impact they are having on the market.
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