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November’s statistics on lending to individuals reveal little change in November from the previous month, with total lending increasing by £0.7 billion.
Within this, lending secured on dwellings increased by £0.7 billion, compared to October’s rise of £1.2 billion. Loan approvals improved slightly (48,019) compared to the previous month (47,315).
Consumer credit fell by £0.1 billion in November, and continues to reflect consumers’ cautious approach to spending given the rising costs of living and economic uncertainties.
Although consumer spending generally does not directly result in infrastructure investment, its indirect effects are important for the long term investment profile of an economy. Consumer spending on products and services allows companies to make profits. Businesses subsequently invest these profits in machinery and buildings to expand production or service provision. In doing so they themselves demand more goods and services such as energy, oil and broadband, all of which increase the willingness and propensity of companies to invest in the maintenance and/or improve the UK’s infrastructure.
The continued cautious approach by consumers and tightness of the financial sector is likely to result in some companies delaying investment decisions, while others may now choose to act early in hope of ascertaining a greater market share as consumer spending and economic conditions improve.
To read the Bank of England’s release please click here
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