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UK Consumer Credit Market Outlook - Q3 2007 - Market Focus

http://www.companiesandmarkets.com/Summary-Market-Report/uk-consumer-credit-market-outlook-q3-2007-market-focus-34132.asp

Report Summary

Introduction

This product combines a briefing and an interactive forecasting model to review the performance of the UK consumer credit market in Q3 2007 and discuss its prospects for the rest of the year.

Scope

Provides the latest marking sizing figures for the UK consumer credit market by product line and analyses industry trends in Q3 2007. Covers unsecured personal loans, credit cards, motor finance, retail finance (store cards, installment credit and mail order credit) and overdrafts. Details thelatest scenario based forecasts for the future of the consumer credit market in an accompanying interactive Excel model.

Highlights

While Q2 2007 saw a continuation of the consumer credit market's poor performance, Q3 saw a slight improvement. High levels of consumer debt and a lack of consumer confidence continue to restrict new business; however, Q3 2007 saw the best quarterly performance since Q4 2005, mostly as a result of an improved credit card market. Credit cards and overdrafts were the major catalysts behind the slight improvement of the total consumer credit market in Q3 2007. However, many products continue to perform weakly. This was true particularly for unsecured personal loans and retail finance. As the credit crunch has hit and a significant number of households are facing financial difficulties, a number of lenders have exited the unsecured personal loans market. Meanwhile, the fall of Northern Rock has left a significant gap in the unsecured personal loans market.

Reasons to Purchase

Review market performance in Q3 2007 to place your performance in context to the market's. View the latest independent quarterly and annual forecasts for the UK consumer credit market to plan your future strategy with confidence. Understand the key challenges facing lenders and the impact they are having on the market.

Table of Contents

DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
The consumer credit market improved slightly in Q3 2007, but lending remains weak 2
The consumer credit market continues to experience a difficult time 2
Higher interest rates and tighter lending criteria continued to affect the market in Q3 2007 6
The base rate was increased to 5.75% in July 2007 to curb inflationary pressures 6
High household debt and higher costs of borrowing have slowed the market 6
Lenders became even more conservative with regards to lending criteria as a result of the credit crunch 6
Datamonitor forecasts a difficult market through the end of 2007 and 2008 7
Datamonitor's forecasting model explained 7
Datamonitor envisages a slightly better outlook for the rest of 2007, but a less optimistic 2008 7
Datamonitor's forecasts continue to be affected by the flat credit card market and decline of unsecured personal loans 8
Datamonitor has analyzed two additional alternative scenarios 9
Northern Rock is awaiting bids, while some lenders have exited the personal loans market 11
The fall of Northern Rock has left a gap in the unsecured personal loans market 11
A number of lenders have left the personal loans market 11
On the regulatory side, consumers will benefit from changes to the Banking and Business Banking Codes 12
APPENDIX 13
Supplementary data 13
Definitions 14
Bank of England base rate 14
Balances outstanding 14
CAGR 14
CCJ 14
Consumer credit 14
Gross advances 14
OFT 14
Overdraft 14
Methodology 14
Forecasting methodology 15
Choice of economic variables 15
Model outputs 15
Bespoke scenario-based forecasting 15
Ask the analyst 15
Datamonitor consulting 16
Disclaimer 16
List of Tables
Table 1: Quarterly total consumer credit gross advances and balances outstanding in the UK, Q3 2005-Q3 2007 3
Table 2: UK consumer credit gross advances by product, Q3 2005-Q3 2007 (£m) 4
Table 3: Datamonitor's updated macroeconomic variables for 2006-11: Neutral Scenario 8
Table 4: Datamonitor's updated neutral consumer credit forecast by product line, 2006-11 (£bn) 9
Table 5: Datamonitor's updated Pessimistic consumer credit forecast by product line, 2006-11 (£bn) 10
Table 6: Datamonitor's updated Optimistic consumer credit forecast by product line, 2006-11 (£bn) 11
Table 7: Datamonitor's updated macroeconomic variables for 2006-11: Pessimistic Scenario 13
Table 8: Datamonitor's updated macroeconomic variables for 2006-11: Optimistic Scenario 13
List of Figures
Figure 1: Total UK consumer credit new lending saw a slight reprieve in Q3 2007 2
Figure 2: Most UK consumer credit products continued to perform weakly in Q3 2007 4