Pound tumbles as UK factory growth hits 17-month low - business live

In another worrying sign, UK consumer credit growth slowed sharply in March.

Phillip Inman, economics writer, explains that it could show that people are less confident about economic prospects:

“Consumers cut back sharply on their unsecured borrowing in March. The total borrowed on credit cards dropped from £700m in February to £100m in March, while the total borrowed for other forms of unsecured debt, primarily car loans and overdrafts, fell from £1bn to £100m

The dramatic decline in consumer borrowing follows a clampdown by the chief financial regulator, the Financial Conduct Authority, on bank lending to consumers, which grew by 10% or more on average between 2014 and 2017.

But uncertainty surrounding the Brexit talks is also understood to have played a large role in consumer’s turning away from extra borrowing to fund big ticket purchases like cars and furniture.

The average growth rate in total unsecured lending fell to 0.1% month on month in March, which dragged down the year on year figure to 8.6% from 9.4% in February.

Peter Tutton, head of policy at the debt charity StepChange, fears the accumulation of debt in recent years, especially by poorer households, remained a problem despite the recent slowdown.

He said:

“A decade on from the financial crisis, we must not lose sight of the impact of sustained pressure on already stretched household budgets in coping with the rising daily cost of living. We estimate that severe problem debt currently affects some 3.4 million people in the UK, so tackling and preventing vulnerable households from falling into problem debt should be high on the policymakers’ agenda.

“While the financial system may not be at risk of history repeating itself in terms of systemic failure, at household finances level the risks are all too real.

He said regulators and lenders needed to reduce the number of people inadvertently “trapped in a vicious cycle persistent problem debt” by reviewing who is offered a loan, while the government must support affordable alternatives to affordable credit.

Getting back to the US tariffs.... and the French government have issued a statement reiterating the EU’s displeasure at Trump’s decision.

Paris warns that they will not open talks over wider trade terms unless he gives the bloc a permanent dispensation from tariffs on steel and aluminium.

Jean-Yves Le Drian, the French foreign minister, and Bruno Le Maire, the finance minister said in a joint statement:

“The French Government takes note of the decision announced by the US authorities regarding the new temporary exemption of one month given to the EU on prices of aluminium and steel. We support the positions expressed by the European Commission.

“France will continue to advocate that the EU has a full exemption permanent and unconditioned. There is no reason that the EU is subject to unilateral increases in tariffs on steel and aluminum. France and the European Union are US allies. They are not the cause of global overcapacity in aluminum and steel and fully respect all the rules of the WTO.

“The EU must remain united and solid as it has done in recent weeks.

“We agree that there is an overcapacity problem in the steel industry and aluminum. We are ready to work with the United States and our other partners to make quick and appropriate solutions. But we can do it calmly until we are certain to be exempted permanently from the threat of unilateral tariff increases.”