UK credit card borrowing soars by most since 2005 as cost-of-living squeeze tightens

  • Consumer credit rises 11.6% y/y, highest rate since 2005
  • Borrowing likely reflects deepening cost-of-living crunch
  • BoE data also points to possible slowing of housing market

By Andy Bruce and David Milliken | 31 May 2022

REUTERS — Credit card borrowing in Britain rose last month at the fastest annual rate since 2005, possibly reflecting a worsening cost-of-living squeeze that may now be starting to slow the housing market, Bank of England data suggested on Tuesday.

The BoE said credit card borrowing was 11.6% higher than in April 2021, marking the biggest increase since November 2005.

Overall consumer credit, which includes personal loans and car finance deals, rose by 5.7% in annual terms, the fastest growth since February 2020.

The increase in borrowing came despite business surveys showing signs of a marked slowdown in demand, particularly among consumer-facing companies.

Households were hit last month by a double whammy of surging energy costs and higher taxes. The hit to disposable income – likely the worst since modern records began in the mid-1950s – means Britain is at risk of entering recession later this year.

Last week finance minister Rishi Sunak announced 15 billion pounds ($18.9 billion) of further support for households struggling to meet their bills. […]

Be the first to comment

Post a Comment

Winter Watch