EmerioBanque

UK Public Is Borrowing Less – But Economic Fears Could Reduce Spending

Not everything that came along with the COVID 19 crisis was an affliction, at least for the UK public. The times that we are presently living in are in no way normal. The public activity that we are witnessing with context to expenditure is also not normal.

When the interest rates are being reduced and the overdraft charges are being minimized, you would normally expect the public to don the hat of shopaholics. But, curiously enough, the wave of spending has not picked-up speed this time around.

The UK public is keen on paying off their non-mortgage debts, and credit card bills. Oddly enough, a similar situation was observed during the financial crisis of the late 2000s.

There is something about the crisis that triggers a sense of financial awareness and responsibility in the public. More so this time around, or else, how can you explain the monthly debt repayment of £7.4billion?

One can argue that with everything closed down, the options for public spending their wage money and government subsidy is minimal. Shopping malls, movie theatres, amusement parks are all being closed down, so where will the money go. Better spend it to repay the loans.

The UK public is prioritizing their debt repayment, and getting their finance in order. So that when everything opens up, they can adjust to the economic changes without any sort of financial burden.
This is the financial responsibility of the mood/awareness that we are talking about.

From the standpoint of financial stability post the lockdown phase, it seems that it is not only a lack of spending opportunities that affected the public expenditure, it is also the mindset of being at pace with the economic realities of the post COVID-19 period. This period could even include inflation that outlives the current wage value in terms of purchasing power.

It is also important to note that people are not only paying the debts, but they are also saving money, as the expenses have come down. This is being done to create a buffer for the future seems to be the mood of the nation.

There is a snarky correlation between consumer spending and business raising funds. On one hand, the consumers have paid £5bn worth of credit card bills in April, while on the other hand, the business took a loan of £8.4bn to stay afloat.

Even after the lockdown norms are relaxed, experts believe that consumer spending will be relatively low. Also, with the rise in unemployment, an economic recession is something that is very much on the cards.





Other news

Exchange Rates

Currency Buy Sell
EUR USD 1.06 1.10
EUR GBP 0.86 0.89
EUR CHF 1.02 1.06
EUR AUD 1.72 1.70
EUR JPY 116.08 116.56
EUR MYR 4.50 4.77
EUR SGD 1.53 1.57
EUR HKD 8.27 8.53
EUR CAD 1.54 53.84
EUR DKK 9.75 1.55

Most Recent Blogs View All Blogs

22 Nov

How Banks Can Parlay Technology into a Competitive Edge

Technology has become a new basis for banks in order to survive in the competition. Leading banks us...

21 Nov

Trade Credit Finance: The Advantages and Disadvantages

The Trade credit is basically a kind of short-term financing which permits the businesses to purchas...

15 Nov

International Trade Finance Trends: What To Expect In 2023

International trade finance is considered as the dynamic along with an ever-evolving field which als...

Disclaimer

Emerio Banque is an innovative global financial institution incorporated in England and Wales with Legal Entity Identifier 875500DGPPWAFABBK130. Emerio Banque does not offer its products and services to businesses and/or persons registered in the United Kingdom.

No information on this website should be construed as a solicitation, offer, recommendation, and representation of suitability or endorsement of any security, investment or strategy.

Important Notice

Emerio Banque would like to advise its customers to report any suspicions which they may have regarding the identity of any intermediary who promotes products or services offered by us or any intermediary bearing similar names. You should verify with Emerio Banque by calling our Customer Service Number on +44 203 059 7831 or emailing help@emeriobanque.com

Please also be aware of bogus SMS messages and voice message calls or fraudsters who impersonate the staff of Emerio Banque.

We have recently become aware of a number of entities with different names misrepresenting themselves as associates, partners or agents of Emerio Banque.

Please be informed that Emerio Banque is not associated with nor do we have any business connections or dealings with such institutions.

Emerio Banque takes all information regarding suspicious fraudulent activity very seriously. Please immediately inform us at compliance@emeriobanque.com if you suspect or are approached by persons misrepresenting or impersonating Emerio Banque and/or its officials. We will make investigations and will take legal action where necessary.