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Next week's economics: 27 June - 1 July

Teaser: Next week’s Money and Credit figures will tell us whether UK consumers are feeling the squeeze
Next week's economics: 27 June - 1 July

Household savings data from the Bank of England’s Money and Credit release is out on Friday. In the early days of lockdown, monthly household savings soared to £30mn, and last month’s figures were still significantly above pre-pandemic levels: any indication that households are saving less will be telling. 

Although high borrowing and low savings are often associated with consumer exuberance, the opposite is true here. Recent ONS data found that consumers were increasingly tapping into savings and using more credit than usual as inflation squeezes their budgets ever tighter. The release will also cover mortgage approvals, which fell below pre-pandemic level last month. Mortgage lending also decreased in April, and it seems likely that the downward slide will continue this month.

Nationwide’s House Price Index is out on 29 June. Although house prices rose in May, anticipate a slowdown at some point over the coming months. The question is, when? Low unemployment and a meagre stock of homes may keep up momentum for now, but affordability could soon start to groan as the Bank of England’s rate hikes trickle through to higher mortgage costs. 

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