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

This Saturday (Halloween of all days) it was announced that England would enter another lockdown for November… scary stuff… with cases rising and lockdown already in place elsewhere in the UK, for many this had felt inevitable, but here we are in lockdown again.

The FCA was very quick with their announcement for mortgage holders.

• Everyone can still take advantage of a mortgage payment holiday up to 6 months.
• For those that have already used the 6 months, further help is available from lenders (albeit most likely Credit Bureau impacting).

Full marks to the FCA for the speed of the announcement, and no doubt it will be a busy few days in many lenders this week. Expect more to come for the consumer credit side of businesses too.

The key announcement was the extension of the Furlough scheme – the existing scheme was due to end this week and with over 2 million people still on furlough, this will no doubt be a relief to many.

However, this will also have of further spreading the impact from COVID economic changes, for borrowers and lenders, moderating delinquency volumes… for now at least.

The banks had already been anticipating increased losses. Several released dramatic increases in provisions for bad debt this week, this is unlikely to change. Interestingly though in some areas profit was up, driven by an increase in lending from the mini-property boom we had post Lockdown I. We live in a topsy turvey time for sure.

Before all of this, the other big news was the ruling from the ICO, the UK’s information watchdog, that the Credit Reference Agencies (Experian in this case) needed to make changes on how they handle and process data. In particular this related to consent and transparency on how consumers information is used.

It sounds like changes have already been made and this will likely rumble through the process for a while. Marketing and acquisition processes, in particular, will be affected, although may see some in areas such as utilities, where a customer could refuse consent they still must provide service… one to watch.

Finally a couple of other stories of interest around the restructuring of the economy.

• Private rents in London plunge by up to 34% amid Covid crisis
• Working from home is proving to be a revolution in our way of life

It is all change again… enjoy the rest of the weekend…. @chris_w_tweet