The Math for 0% Financing Is Harder for UK Retailers to Add Up

The case for generous 0% financing deals is getting harder for UK retailers to justify.

For years, British sales reps enticed customers by offering an array of offers -- interest-free loans, no deposit and the ability to stretch out payments for five years. But now with benchmark rates on the rise, those deals are far more expensive for stores to offer.

“Retailers are paying us a significant amount more,” said Brian Flesk, the head of retail at Novuna, part of the consumer finance business of Mitsubishi HC Capital UK Plc.

Consumer credit firms, like Novuna and Barclays Partner Finance, ...