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Britons have been borrowing heavily through personal loans and credit cards over the last 18 months.
Britons have been borrowing heavily through personal loans and credit cards over the last 18 months.

UK Consumer Borrowing Rises to 9.7 Percent

UK Consumer Borrowing Rises to 9.7 Percent

Consumer borrowing grew at almost 10% in August, official figures are expected to show. The consultancy Capital Economics has said in a note to clients: “We expect annual growth in consumer credit of 9.7% in August, down from a peak of 10.9% last year. That would be consistent with a monthly rise in unsecured lending to individuals of about £1.3 billion ($1.75 billion),” the Daily Mail online reported.
Britons have been borrowing heavily through personal loans and credit cards over the last 18 months.  Now the Bank of England’s Financial Policy Committee is widely expected to rein in rampant unsecured lending by raising bank capital requirements for those most active in the market.
Separate figures out on Friday will show the UK is still running a large current account deficit, a measure of Britain’s trade position.
Consensus forecasts suggest the Office for National Statistics will say the current account deficit stood at £16 billion in the second quarter of the year, slightly down on the £16.9 billion in the first quarter of 2017.
The collapse in sterling has failed to boost net trade over the last year, with imports rising as well as exports.
Britain faces a bleak economic future because of Brexit, according to a shocking verdict by a credit ratings agency. Moody’s cut its rating for UK government debt amid growing fears that the decision to withdraw from the EU will do long-term damage to the economy.
The announcement late on Friday night is a blow to Prime Minister Theresa May who just hours earlier had delivered a landmark speech offering her vision for leaving the European Union. It means her administration becomes only the second UK government in four decades to suffer a rating downgrade from the agency.
The cut will mean the government will find it harder to borrow money to fund Brexit plans without paying higher interest rates. Moody’s complained that UK civil servants will be ‘increasingly distracted’ by the challenges of Brexit instead of running the country and fixing the economy.
“Moody’s expects weaker public finances going forward, partly linked to the economic slowdown under way but also reflecting the increasing political and social pressures to raise spending after seven years of spending cuts,” it said.
Moody’s first downgraded UK debt in 2013 amid former Chancellor George Osborne’s austerity program. Friday’s downgrade to Aa2 means the UK is now two notches below the prime AAA rating enjoyed by other countries including Germany, Norway and Sweden.

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