More people expect to take out credit in Q4 UK Financial Activity Barometer

Financial services providers can expect weak demand in the coming months across most product areas according to the 37^th quarterly Financial Activity Barometer (FAB). Only in consumer credit is there any rise in demand – albeit from a historically low level. Many indices are close to survey lows

Future savings, investment and borrowing activity among UK consumers is set to remain depressed in the FAB commissioned from GfK NOP* from financial and marketing research boutique JGFR.

The proportion of consumers intending to undertake one or more of 18 specified savings, investment or borrowing activities fell back from 71% in June to 69% in September and compares with 73% a year ago.

While the proportion of adults intending to save, invest or borrow is slightly lower on the quarter, the proportion undertaking 2 or more activities is slightly higher – up from 49% to 50%- but down from 55% a year ago – a reduction of some 2 million people and highlighting the tough operating climate for financial services businesses.

Product demand points to greater squeeze on incomes - less cash to deposit, more demand for loans and overdrafts and depressed housing demand

Fewer people intend to save or invest in the coming months, down from 62% to 60%, close to the survey low of 58% in December 2007 at the height of the credit crunch.

An increase in struggling households is evident this month which has helped push up demand for consumer credit, up from 10% in June to 11% in September and up from 9% a year ago. Overall borrowing demand is up from 13% to 15% on the quarter. Mortgage demand continues to be in the doldrums although has edged 1 point higher to 6%, and is slightly up on a year ago.

A full News Release can be found in the Member’s area

Full analysis of the Financial Activity Barometer can be found in the Autumn 2011 Financial Activity Bulletin to be published on October 13^th. For details or to order please contact John Gilbert (0208 944 7510 / 07740 027968) or email j.gilbert@jgfr.co.uk