ISSUE NO. 58 · FRIDAY 23 OCTOBER 2026

Confidence down to -40, £4bn set aside for bad loans as household buffers hit a three-year low, and £2.6bn for credit data

The British Retail Consortium’s confidence index fell to -40 in October, a third monthly drop, and in the same survey people said they would spend more. That is not optimism. It is what bracing for higher prices looks like when you still have to eat.

The banks are reading those same households from the other side of the counter. Analysts have them putting £4bn aside for bad loans in 2027, and the cushion borrowers are leaning on is the thinnest in three years. Meanwhile LSEG has paid £2.6bn to own the data on credit risk.

Below: a mood five days from the Budget, the provision the lenders are building, a bet on debt as an asset class, four numbers, the diary and one calculator.

Lead

Confidence fell to -40 and spending plans rose, which reads like a contradiction until you ask what people expect to pay.

The index dropped from -32, its third straight monthly fall, with inflation and interest rates named as the drivers. Households rated their own finances over the coming three months at -18, down from -15 and the second-lowest on record. Spending expectations jumped from a net five to 15, but 36% now expect to spend more on groceries against 28% in September, and industry figures see food inflation reaching 6.4% by next July. Helen Dickinson of the BRC wants the Chancellor to take costs off retailers — employer National Insurance, business rates — arguing a 20% rise in the sector’s tax bill over two years has left nothing in reserve. Read the full story →

The Numbers

Four numbers. Bank Rate and the September CPI print are where they were yesterday, the index rose on Wednesday, and the fourth is the mood the Chancellor is walking into.

More News

Britain’s biggest lenders are expected to set aside £4bn for bad loans in 2027, and one of them looks more exposed than the rest.

Lento Tanq of Bloomberg Intelligence expects provisions to keep climbing as people lean on unsecured credit to cover living costs, and reckons the gap between losing a job and missing a payment has narrowed. His research puts 55% of households at no more than three months of cover if the income stopped, the weakest in three years, with Cornwall Insight expecting a £276 jump in energy bills in January. Barclays grew its UK card book to £17.5bn by mid-year and personal loans to £8.9bn, and set aside £823m in the first quarter. HSBC has lifted its 2026 loss forecast to 45 basis points. Read the full story →

LSEG is paying £2.6bn for a New York credit data firm, its biggest deal since Refinitiv.

Octus sells intelligence on the corners of the credit market where trades are hard to see, and LSEG’s case is that public and private credit are converging. Permira bought it for $1.3bn in 2022 and is selling at $3.5bn. Days earlier Tradeweb, which LSEG owns, set out a $1.8bn plan for Trumid, an electronic credit marketplace — data on one side, trading on the other. David Schwimmer frames the pair as a push to lead in bond data and trading. Third-quarter gross profit rose 9.5% to £2.2bn, helped by a 16% jump in over-the-counter derivatives fees, and the margin forecast went up for a second time. Read the full story →

UK finance, in plain EnglishFollow @MJBurrows on X	Follow

On the Diary

• Friday, 7.00am BST — Retail sales, Great Britain, September. What shoppers actually spent, against what they say they plan to.
• Friday, 9.30am BST — UK trade, quarterly goods and services, Q2. Where the deficit sat before the oil shock worked through.
• Friday, 9.30am BST — Indicators of house building, Q2. How many homes were started and finished, not just promised.
• Wednesday — Healey’s first Budget. The calendar is quiet until he stands up, and everything above is pointed at it.

The Toolbox

One tool from the site each issue, picked to fit what has just happened. Free, no sign-up, and it shows its workings.

UK Take-Home Pay Calculator

“Five days out, it is worth knowing what you keep before anyone changes it. This works out take-home pay from a salary, with tax, National Insurance, pension and student loan in the sum.”

The Close

Two of today’s stories are the same household seen from opposite sides of the counter: the shopper working out whether the weekly bill still works, and the lender deciding how much to set aside in case it does not. The third is a company paying real money for the ability to price exactly that risk. Watch which of the three turns out to have read next Wednesday correctly.

If something here is wrong, or there is something you want dug into, just reply. It comes straight to me.

MJB