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Neil Williams, Managing Director of LendingMetrics, said: ‘Our data con- firms what we have predicted: that we are finally returning to normal volumes of spending. The lack of borrowing last year indicated that people were gener- ally able to save during the pandemic, so spent what they saved, or acted cau- tiously last year, and are now returning to pre-pandemic borrowing levels. The vast majority of our clients had antici- pated this and put in place plans for increased transactions during Q4 and Q1. They’re also now benefitting from the multi-bureau approach of LMX when paired with ADP.’ With a steady increase in transactions month-on-month (the company saw a 7.5% increase from Q3 to Q4), Mr Williams predicts activity will further improve. ‘Provided we can get over the Omicron wave, as the weather improves so will spending activity. This bodes well for Spring/Summer 2022 and echoes our usual message of lenders needing to be prepared for more pent-up spending.’ If there is a “circuit breaker" lockdown, LendingMetrics is predicting that the spring resurgence will be even more marked, with delayed spending combin-
"There is going to be turbulence in the market in 2022" ‘When inflation rises, people typically spend money rather than save it. They won’t delay, especially after a circuit ing with rising inflation to spur activity. The current high level of 5% inflation will likely result in increased spending, partly as a result of interest on savings remaining disappointingly low. breaker. Also, borrowing rates are not going to appear high when compared to inflation, meaning buoyant demand for finance, particularly with interest rates on loans and mortgages being fairly low at the moment.’ The LendingMetrics MD said that lender adaptability may be key to making a success of 2022, and warns that there could be instability on the horizon. External factors, such as rising energy prices, will have a knock-on effect on everything else. An anticipated spend- ing increase could cause inflation to be heavily compounded, leading to a lasting long-term impact on the market.
Mr Williams added: ‘There is going to be turbulence in the market in 2022, which means lenders need to be able to change with the market or risk being left behind. Only those who can react fast, change their products and adapt their risk assessments quickly will be capable of riding the storm.’
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Metrics Monthly | 07
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