Data analytics company LendingMetrics is predicting a phenomenal spending rebound by the end of the second quarter 2021, if the brakes are taken off pent-up demand.
The company, which supplies automated underwriting platforms and borrower vetting technology to lenders, has detected record volumes of suppressed demand in its data streams. And says that UK consumers are deferring not cancelling spending decisions in large ticket areas such as holidays, cars and home improvement.
David Wylie, Commercial Director of LendingMetrica, said “Tens of millions of us in the UK have had to put plans on hold, whether it be holidays, home improvements, or a new car. We have been unable to spend money and, in the vast majority of cases, either on full pay or on furlough pay. This has created a growing volume of deferred spending. As soon as the conditions are right, that spending is going to cascade through the economy.”
The company points to the record levels of savings and the quantity of credit card and loan debt paid off by UK consumers, with the first lockdown alone accounted for £7.4 billion paid off. It says this will free up spending space for consumers and further boost purchasing.
Wylie added “The conditions are right for a very, very strong rebound from the end of Q2 onwards, provided we move out of lockdown. If that happens, demand for everything will be phenomenal, and applications for finance will explode on the back of released demand. Lenders should be ready to cope.”