The Bank of England said UK credit card default rate has increased to the highest level in the last two years. According to the bank’s Credit Conditions Survey, the index of defaults rose to 22.9 in the first quarter and is expected to remain unchanged over the next three months to end‑May 2019. The figure increased from 12.7 at the end of 2018.
The report calculated results based on a score assigned to each lender’s response. Lenders who said that credit conditions have changed ‘a lot’ were assigned twice the score of those who said conditions have changed ‘a little’. The scores were then attributed to lenders’ market shares, and the results were analysed by calculating net percentage balances.
The figures show a sign of strain on UK shoppers, who have had to deal with wage declines, forcing them to borrow cash in order to maintain their spending habits. Although wage growth has slowly started to pick up the pace, it will take a long time to stabilise.
Despite Brexit, total earnings in the UK including bonuses increased by an annual 3.5 percent in the last three months to February, Office for National Statistics reported. That said, average weekly earnings rose by 3.4 percent