New regulations ‘could hinder consumer credit market’

The consumer credit market could be hampered by the implementation of further regulations, according to new findings.

Figures from the Finance and Leasing Association indicate that new credit provided by its members decreased in the second quarter of 2009 by 17 per cent from the previous year.

Head of research and chief economist Geraldine Kilkelly commented on the statistics, stating that the provision of reasonably-priced credit is in danger of being obstructed.

“The wave of new regulation from the government and from Brussels could jeopardise lenders’ ability to make available the credit that will undoubtedly be needed to support a sustainable economic recovery,” she said.

Secured and unsecured lending markets showed the most pronounced reduction, with new business falling by 84 per cent and 43 per cent respectively in the second quarter

A recent report from uSwitch.com revealed that 13 per cent of consumers are sure that the recession will improve by the end of 2009 and over 21 per cent feel positive about the recovery of the housing market.

By Sarah Adie