BoE Consumer Credit

What is BoE Consumer Credit?

BoE Consumer Credit is monthly net borrowing by United Kingdom individuals in sterling, seasonally adjusted and measured in billions of pounds. Net borrowing means new borrowing minus repayments during the month. It has two parts: credit card borrowing and other borrowing such as personal loans, car finance and overdrafts. Charge cards count with credit cards where separate data are unclear. It covers resident individuals borrowing from banks, building societies and specialist lenders. Non-bank data is collected directly by the Bank after moving from the statistics office survey. It excludes mortgages secured on homes, student loans, business lending and deposits held at banks. The Bank of England, the United Kingdom central bank, publishes it in the monthly Money and Credit release, which has three parts. The Bank policy committees use these statistics to understand economic trends and banking system developments. The monthly history stretches back several decades, with a longer quarterly history.

When is it released and what happens each release?

Each release covers one calendar month. Amounts outstanding are end month stocks, and the monthly flow is the transactions based change during that month. Publication is monthly, usually on working day 21 after the measured month, though holiday periods can shift timing. It appears with mortgage borrowing and approvals, effective interest rates, household deposits, business borrowing and deposits, and broad money and credit aggregates, plus summary tables. Each release compares the monthly flow with the prior 6 month average and reports annual growth rates. Data are based on the most up to date information available at the time of release. Revisions appear by the next scheduled release, rarely extend beyond two years, and substantial revisions carry an explanation of nature and extent.

What moves BoE Consumer Credit?

The headline moves with its two additive parts, since each monthly flow adds directly to the total.

• Credit card lending: sterling credit card borrowing by individuals, including charge cards where separate data are unclear.
• Other consumer credit: mainly overdrafts and other loans and advances, including personal loans, car finance, retailer credit and outstanding insurance premiums.

In a past reference month, net borrowing rose to 1.7 billion pounds after a prior month fall of 0.5 billion pounds. It sat close to an earlier peak of 1.9 billion pounds. Card borrowing held flat at 0.6 billion pounds, while other borrowing rose from 0.5 billion pounds to 1.0 billion pounds. The annual rate held at 7.6%, as card growth eased from 12.5% to 12.0% while other growth rose from 5.5% to 5.7%. The lesson is that a strong headline can come from other borrowing alone while cards stay flat and card growth falls.

How is BoE Consumer Credit calculated?

• Amounts outstanding: start with opening and closing end month balances. The change between them is the basis of the flow.
• Net flow: adjust the change for non transaction effects such as write offs, reclassifications, coverage changes, securitisation and currency revaluation. Write offs never count as borrowing. An illustrative example, not Bank data: 202.0 billion pounds minus 200.0 billion pounds plus 0.5 billion pounds written off. It gives 2.5 billion pounds of net borrowing.
• Seasonal adjustment: the Bank adjusts about 400 series with X-13ARIMA-SEATS and publishes consumer credit seasonally adjusted. Adjusted flows derive from adjusted levels after breaks return.
• Growth rates and total: the one month rate is the flow as a share of the prior balance, expressed in percent. Longer rates compound the one month rates. For example, 2.5 billion pounds on 200.0 billion pounds is 1.25%, and 12 months at a similar pace compound to about 16.1%. Total consumer credit adds card and other flows, with annual rates for the total and each part.

Key point: monthly borrowing does not always equal the balance change, and the series excludes mortgages and student loans.