Moneyadviceforu

The second quarter of 2007 saw a continuation of the UK consumer credit market’s poor performance, a trend that began in 2005. In particular, high levels of consumer debt and a lack of consumer confidence hampered new business levels. Moreover, interest rates remained high.The majority of product lines struggled in the second quarter of 2007. This is particularly true of unsecured personal loans, which have performed poorly since mid-2004. The credit card segment continued to see a weak performance, but Q2 2007 was stronger than Q1 2007. On the other hand, overdrafts put in another strong performance.

Lending will be affected in the short term as a result of the global credit crunch. Indeed, in response to the crunch and a lack of funds on the money markets at low rates, lenders are beginning to raise their prices. Moreover, many lenders will implement stricter criteria and reduce exposure to the sub-prime and non-standard sectors.