Insights into recent economic challenges

The latest data showed consumer prices to be rising at an annual rate of 3.2% in March, down from February’s figure of 3.4%. The fall being the good news, marking the lowest UK inflation rate since 2021. Driven by a fall in food prices, it was also lower than the rate of price growth in the US for the first time since March 2022.

However, this figure was slightly higher than the 3.1 per cent forecast by economists polled by Reuters and the Bank of England and still some way above the BoE’s 2 per cent target. 

While there has been some improvement over the past year, there are still huge numbers of people across the UK who continue to be impacted by this heightened fiscal pressure and a higher interest rate environment.

This news also comes on the back of somewhat mixed research from the Financial Conduct Authority (FCA) which found that while many individuals and households are struggling to meet their financial commitments, the picture has improved over the last year.

The research showed that 7.4m people were struggling to pay bills and credit repayments in January 2024, down from 10.9m in January 2023 but still higher than the 5.8m recorded in February 2020.

During the 12 months leading up to January 2024, 2.7m adults were said to have sought help from a lender, a debt adviser or other financial support due to financial difficulty. 47% of those that sought help said they were in a better position as a result. However, 2 in 5 adults who had fallen behind on their bills said they had avoided talking to their lender about their finances.

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As a lender, we fully appreciate that historic or more recent credit issues are nothing new, but it’s also fair to say that we have experienced a consistent number of enquiries and conversations with our intermediary partners on such cases. In addition, we are also seeing an increasing number of enquiries around complex incomes or multiple sources of income and from key workers who are struggling from a high-street affordability perspective.

Specialist residential borrowing has become an ever-growing part of the modern mortgage market, and certainly within our lending proposition. As a business, we are constantly evolving to ensure we can help even more credit worthy borrowers, both existing and potential, to navigate an array of financial pain points to achieve their borrowing needs and homeownership aspirations.

*This article was originally published on The Intermediary 

References:

https://www.fca.org.uk/news/press-releases/improving-picture-personal-finances-many-still-struggling

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