We tightened our lending in lockdown

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Buy now, pay later service Klarna has seen a boom in business during Britain’s lockdown.

That includes a 105% increase in the number of running shoes purchased using its services, a 60% hike in beauty product sales and “significant uplift” in purchases of bicycles and cycling accessories.

“We saw our volumes increase during that period just reflecting the increase in digital transactions generally,” Luke Griffiths, Klarna’s vice president, told BBC Radio 5 Live’s Wake Up To Money.

However, as sales increased but more shoppers faced the financial uncertainty of lockdown, the company did tighten its rules on lending.

“Obviously with people’s financial circumstances changing during this period, we have constantly reviewed our policies around the type of customer that we accept,” Mr Griffiths said.

He says the firm is now only accepting customers who it believes will and can repay on time.

As a result, he does not believe Klarna

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Credit card spending fell 50% in first month of lockdown

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Credit card spending in April dropped by 50% to £8.7bn. Photo: Getty
Credit card spending in April dropped by 50% to £8.7bn. Photo: Getty

Credit card spending in April dropped by 50% to £8.7bn ($11bn), compared with April 2019, new data from UK Finance reveals.

The number of credit card transactions by UK cardholders also saw a notable fall of 46% to 163 million, the lowest level in over nine years, as borrowers cut down on credit card spending as the coronavirus pandemic hit the country.

Outstanding balances on credit cards fell by £4.7bn in April, the largest monthly drop in over a decade, and more than double the £3.1bn fall in outstanding balances in March, as many consumers chose to make repayments rather than spend on their credit cards.

Spending on debit cards, however, remained strong in April, with the total value of transactions increasing by 0.9% to £51.8bn. This is despite the number of debit card transactions falling by 5.1%

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Credit card spending fell 50% at start of lockdown

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Credit cards spending dropped by nearly half at the start of lockdown as people played safe with their finances and shunned big purchases.

A total of £8.7bn was spent on credit cards in the first full month of lockdown in April, half the level of April last year, UK Finance said.

The banking trade body said this was the lowest level of spending seen since the last economic downturn.

The cancellation of holiday plans is one likely reason for the fall.

Safety-first

Consumers often use credit cards to pay for summer getaways or major purchases such as household appliances, owing to the extra protection available if something goes wrong.

Many people uncertain about the coronavirus effect on their jobs and finances would have put off buying these items, UK Finance said.

The temporary closure of shops and travel restrictions would also have meant many people put these buying decisions on

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Lockdown exposes looming tech gaps as money management goes digital

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Getty/iStock
Getty/iStock

Two-thirds of UK adults now rely on mobile and online banking technology to manage their money, as lockdown prompts the wholesale shift to digital financial management.

Since March, a study of thousands of British adults has found almost 90 per cent check their accounts, 80 per cent transfer money, and 35 per cent even withdraw investment funds using fintech, as physical banking options remained closed.

Others have opened savings accounts, applied for credit cards and extended overdrafts. More than a fifth of fintech users said they have successfully secured new financial products during the lockdown without having to speak to a single human being, according to a new study seen exclusively by The Independent.

Almost half of consumers plan to continue using tech much more, even as bank branches reopen, and now say their technology offering is a “key consideration” when choosing a financial services provider.

“In light

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How 5 fashion labels transformed to survive lockdown

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Kitri Brora
Kitri Brora

News in the retail sector is gloomy right now, with headlines about falling sales and much-loved brands going into administration. But some small businesses have been clever and nimble enough to make the best of extraordinary circumstances…

Otiumberg

Otiumberg
Otiumberg

Solid gold personalised name bracelet, £550; Vermeil name bracelet, £140; Oval huggies, from £60-£140, all Otiumberg

As chosen by Lisa Armstrong

When the UK went into lockdown, 31-year-old Rosanna and 35-year-old Christie Wollenberg, the sister-duo behind Otiumberg, the stylishly understated source of irresistibly pretty jewellery, had three hours to clear their new showroom of stock.

“I ended up moving hundreds of thousands of pounds worth of jewellery to my small flat in south London without proper insurance. It was either that or lose access to it and we didn’t know how long that would be for,” recounts Rosanna. Fortunately, because they specialise in small, delicate pieces, the haul was

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UK economy shrinks by one-fifth under lockdown

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The UK’s economy shrank by 19.1% in the three months to May, as the full impact of lockdown was felt, the Office for National Statistics has said.

The economy actually grew by 1.8% in May, but this was not enough to make up for the fall of 6.9% in March and the record 20.4% decline in April.

Manufacturing and house building showed signs of recovery in May as some businesses saw staff return to work.

Despite this, most of the economy was “in the doldrums”, the ONS said.

“The economy was still a quarter smaller in May than in February, before the full effects of the pandemic struck,” said Jonathan Athow, deputy national statistician for economic statistics at the ONS.

“In the important services sector, we saw some pick-up in retail, which saw record online sales. However, with lockdown restrictions remaining in place, many other services remained in the doldrums,

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Buy now, pay whenever? Lockdown lift for online shopping loans

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By Nikhil Nainan

(Reuters) – Browsing online during lockdown, Jessica Friend spotted a pair of Ray-Ban sunglasses she liked, but the price tag made the 30-year-old Ohio resident think twice.

What persuaded her to click ‘buy’, Friend said, was the short-term credit offered by Afterpay, which split the $260 payment into four interest-free instalments.

Afterpay is among a handful of alternative credit firms which offer small loans, mostly to online shoppers, and make their money by charging merchants a 4%-6% commission.

These buy-now-pay-later (BNPL) firms have benefited from a shift to online shopping during the coronavirus crisis in countries including the United States, where state aid has also boosted retail sales.

“I’m more inclined to use them because they make it easier to afford to get the things I want all at once … and when I want to splurge on something,” Friend said of the loans.

Some investors are

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‘Inherent sexism’ and ‘snobbishness’ in government’s lockdown lifting, Labour business spokesperson says

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Getty/iStock
Getty/iStock

Labour’s business spokesperson has blasted the “inherent sexism” in the government’s lifting of lockdown, which has seen pubs and barbers allowed to open their doors before beauty salons and nail bars.

Lucy Powell warned that Britain’s high streets could become “ghost towns” unless the government steps up financial assistance for services like the beauty industry which are most badly affected by social distancing measures.

And she said that “snobbishness” may play a part in ministers overlooking services used mainly by women and young people while displaying “macho bravado” about encouraging drinkers to return to pubs.

Speaking to The Independent, Ms Powell said chancellor Rishi Sunak’s £1,000 bonus for keeping on furloughed staff – announced on Wednesday – was not enough to stave off redundancies, and urged him to extend his job retention scheme to Christmas at least for sectors like hospitality which are least able to make a

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