Quite a busy week this week, what with lockdown restarting in England, and new tough restrictions in many other European countries, France, Italy and Belgium to mention a few. A second wave is really upon us now.
The UK government responded quickly with more support for the economy, £150 billion from the Bank of England, and a re-extension of Furlough until March.
Why this is March in order to cover a 4 week lockdown… it was not explained, but does not bode well. All the rumor was we will likely be in lockdown until in the new year… albeit with a suitable break for the holidays.
The FCA also responded with an extension of payment holiday support for mortgage holders and consumer loans, we warnings to “not contact your lender about this extended support just yet”.
Unlike last time this does not seem to have resulted in significant volumes of calls, although most were well prepared in any case.
The big question this raises is the impact of these measures on arrears volumes… will kick the expected delinquency peak down the road?
This is a critical question for many firms… some of whom have been hiring staff, others holding off… all trying to get the timing right, and with all the change it can be a tough call.
The consensus however seems to be that it will indeed move the expected peak from Oct/Nov this year to Jan-March next year…. (although counter to this thinking was a story on and increase in missed card payments)… mind you a lot could still change and it is one we will need to watch closely.
Other key stories this week
- Consumer car finance volumes continues to be up … people need a car to get to work after all and it is safer than public transport
- Third of staff ‘fear catching Covid at work‘… more pressure from employees to try to work from home if possible
- Credit applications being declined due to lack of information … likely to be increasingly prevalent as historical data becomes less representative of today
- Increasing house prices… but is this is bubble?
So, it looks like we are in this for quite a while longer… and likely the new normal… something we need to adapt to now.
Have a good weekend everyone… @chris_w_tweet
