Economy On Track To Grow
Economy set to grow 2.7% in 2014 as mortgage and consumer lending take off and finally return to 'normal'
Britain’s economic recovery will accelerate this year as improvements in consumer credit and mortgage lending continue to support growth, according to a recent forecast.
Both markets will grow at a healthy rate of more than 3 per cent this year, the influential EY ITEM Club said, helping the overall British economy grow by 2.7 per cent.
It forecast the consumer credit market would grow by 3.1 per cent this year (to £164billion), returning to normal levels for the first time in more than four years after anaemic growth of 0.8 per cent last year.
The economic think tank said banks would continue to grow mortgage lending this year on the back of an increasingly strengthening housing market and falling unemployment.
Andrew Goodwin, senior economic advisor to the EY ITEM Club forecast for financial services, said: ‘2014 will hopefully be the real turning point for many UK households’ access to credit. Last year we saw growth in credit card lending and demand for car finance recovering strongly, but other forms of unsecured credit either fell or remained stagnant.
‘This year we expect growth across the board – as well as a swell in consumer demand for credit cards, we expect stronger demand for big-ticket purchases, driving retail finance and personal loans, which will be good news for banks.’