Credit card spending did not increase
The level of savings seen in the UK fell to £7.1 billion in July from £9.8 billion the previous month, but credit card spending did not increase.
£1.4 billion in mortgage obligations have been paid back by individuals, this is the second time in the past decade.
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According to AJ Bell’s personal finance director Laura Starr, children who go on summer holidays were key factors in increasing their savings and reducing their spending.
“There were fewer savings than in July than in June, £7.1 billion of money was cleaned up that month, and the previous month there was a fall of about £3 billion. But the interest rate on deposits was once again another historic. It’s obvious that people have decided to go out and spend their money instead of saving it,” Suter says.
Spending has increased, but this was not driven by increased credit card usage.
“Since the start of the pandemic last year, households have repaid a large amount of credit card debt, which started to turn around earlier this year as lockdowns eased and everyone went out and spent more. In July, the average number of borrowings in the pre-pandemic era was zero compared to the average borrowing of £1.2 billion a month, indicating that they are not fully reverting to their old spending methods,” Suter said. He said.
Suter believes many are waiting to see what happens to the housing market at the end of their stamp mission holiday.
“The July data suggests that the market may be slowing, with a net repayment of mortgage debt of £1.4 billion that month, which is one more time in the last decade. That’s all happening. Amid the thickness of the pandemic, when the housing market was effectively shut down last April. The amount we all had repaid on mortgages remained roughly the same as the past year. But the amount borrowed fell to £16.5 billion, the lowest since last June.”
