The UK financial services industry, one of the few sectors to have a large trade surplus with the EU, will see a “pronounced pick-up” in 2019, the forecasts said. The UK will leave the EU in the spring of 2019, after two years of negotiations.
That acceleration after Brexit will see lending to industry top £430bn by 2020, Item Club economists predicted, despite its forecast that overall business investment will decline this year.
While the banking sector could actually shrink slightly in 2018, total assets are set to rise by more than £300bn to reach more than £7.3 trillion in 2020, the forecasts show.
Banks saw total stock rise by 11 per cent in 2016, the fastest growth since the financial crisis.
The sharp rise in inflation is expected to make British consumers tighten their belts as real wages are squeezed, but the outlook for mortgage lending remains positive.
Growth in mortgage lending could slow to 0.1 per cent in 2018, the forecasts show, but will bounce back. The total stock of mortgage lending will rise above £1.2 trillion by 2020, the forecasts show.
Meanwhile, consumers are also expected to borrow more apart from their mortgages, with EY economists expecting an extra £23bn to be lent by 2020.
That would mean the total amount lent to consumers would stand at £216bn, up from the £194bn of loans outstanding in January, reported by the Bank of England. [...]
Full article on City AM
Full report
© City A.M.
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article