LONDON (Reuters) – British households rushed to repay their debts in March as the spread of the coronavirus began to hammer the economy and a measure of housing market activity plunged, Bank of England data showed on Friday.
The BoE said households repaid 3.841 billion pounds ($4.82 billion) of consumer credit, the largest net repayment since records began, driven by a fall in credit card spending.
The data also showed the number of approvals for mortgages plunged to 56,161 in March, the lowest in seven years and a drop of 24% from February’s six-year high of 73,674.
Britain’s economy could be heading for its most severe contraction in over 300 years in 2020 as a result of the government’s shutdown of much of normal activity, the country’s budget forecasters said last month.
Separate data published on Friday confirmed British manufacturers suffered the biggest fall in output and orders for at least three decades in April.
The BoE, which cut interest rates twice in March to a new low of 0.1% and ramped up its government bond-buying, said growth in consumer credit in the 12 months to March was the slowest in nearly seven years at 3.7%.
Credit card spending fell over the 12-month period for the first time on record, down 0.3%.
There were also signs of how much cash the government and the BoE are pumping into the economy to try to soften the hit from the coronavirus shutdown.
The monthly rise in the M4 money supply and M4 lending, as well as net lending to businesses in cash terms, all hit record highs.
(Reporting by William Schomberg, editing by David Milliken)
