V shaped recovery possible

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BoE data fuels hope of V-shape recoveryBank of England (BoE) figures for July have raised hopes that the economy may be heading toward a V-shaped recovery, with borrowing on the up. July saw households borrow an extra £1.2bn in personal loans and credit card debt - more than the average £1.1bn seen in the 18 months to February. Credit card borrowing hit £622m during July, the highest rise in a single month since June 2018, while mortgage approvals rose 26,000 over the month to 66,300, with £2.7bn in new mortgage borrowing. The BoE report shows that lenders have put up the cost of consumer loans amid economic uncertainty driven by the coronavirus crisis, with the cost of new loans up by 0.22 percentage points to 4.64% in July and overdraft charges rising by 1.6 percentage points to 14.84%. The figures reveal that households saved an extra £7bn in July, an increase on the £5bn average seen pre-pandemic but down on the £19.1bn recorded at the peak of the crisis. Companies saved an extra £11.8bn during July as overall deposits rose by £26.3bn.

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