UK credit card borrowing surges at fastest annual rate in nearly two years, driven by festive spending pressures.
In a worrying trend, UK households have been increasing their debt to finance the rising cost of Christmas. According to data from the Bank of England, individuals borrowed an additional £2.1 billion in consumer credit in November, up from £1.7 billion in October. This represents a 12.1% annual growth rate, the fastest in almost two years.
Experts warn that the surge in borrowing could be due to households struggling to cope with everyday expenses under mounting pressure from the rising cost of living. "For many households, the increase in consumer credit borrowing may reflect the reality that everyday costs are becoming harder to manage without turning to credit," said Simon Trevethick, a debt charity expert.
The rise in borrowing is likely linked to concerns about Christmas spending, with 14 million people struggling to afford the festive season according to polling. However, the Bank of England's data also shows households increasing their deposits with banks and building societies by an additional £8.1 billion in November, up from £6.7 billion in October.
This could indicate that households are reorganising their finances in anticipation of tax changes ahead of the autumn budget. Economists point out that speculation about tax rises has had a limited impact on consumer spending decisions so far.
The Bank of England's data also shows a drop in non-food prices, which fell by 0.6% compared with the same month last year amid steep discounting by retailers. Shop price inflation picked up to 0.7% in December, driven by a rise in food price inflation to 3.3%, while retail sales volumes unexpectedly fell by 0.1% in November.
The findings suggest that despite concerns about consumer spending and the economy, households are still finding ways to enjoy festive treats at discounted prices. However, experts caution that this may be short-lived, with borrowing rates set to continue rising as households struggle to cope with everyday expenses under pressure from inflation.
In a worrying trend, UK households have been increasing their debt to finance the rising cost of Christmas. According to data from the Bank of England, individuals borrowed an additional £2.1 billion in consumer credit in November, up from £1.7 billion in October. This represents a 12.1% annual growth rate, the fastest in almost two years.
Experts warn that the surge in borrowing could be due to households struggling to cope with everyday expenses under mounting pressure from the rising cost of living. "For many households, the increase in consumer credit borrowing may reflect the reality that everyday costs are becoming harder to manage without turning to credit," said Simon Trevethick, a debt charity expert.
The rise in borrowing is likely linked to concerns about Christmas spending, with 14 million people struggling to afford the festive season according to polling. However, the Bank of England's data also shows households increasing their deposits with banks and building societies by an additional £8.1 billion in November, up from £6.7 billion in October.
This could indicate that households are reorganising their finances in anticipation of tax changes ahead of the autumn budget. Economists point out that speculation about tax rises has had a limited impact on consumer spending decisions so far.
The Bank of England's data also shows a drop in non-food prices, which fell by 0.6% compared with the same month last year amid steep discounting by retailers. Shop price inflation picked up to 0.7% in December, driven by a rise in food price inflation to 3.3%, while retail sales volumes unexpectedly fell by 0.1% in November.
The findings suggest that despite concerns about consumer spending and the economy, households are still finding ways to enjoy festive treats at discounted prices. However, experts caution that this may be short-lived, with borrowing rates set to continue rising as households struggle to cope with everyday expenses under pressure from inflation.
. They're taking on so much debt just to get through Christmas and it's not looking good 
. I mean, £2.1 billion is a lot of money and that's on top of what they already owe 
. It's not surprising that experts are saying people are struggling to cope with everyday expenses – prices have been rising for ages and it's only getting worse 
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. It's not sustainable and it's only going to make things worse in the long run 
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. Maybe it's time for some kind of debt counselling service or something? 
Whatever it is, we need to see some change soon 
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we need to find ways to support each other and not make debt feel like a necessary part of the holiday season 
And what about the everyday expenses that are causing all these people to struggle? Is there no way for them to cut back without having to resort to credit? 
Maybe it's just me but it feels like we're stuck in a cycle of overspending and debt... anyone else worried about this trend? 
. And what's with the 14 million people struggling to afford Christmas? That's crazy! We have our own problems here like rising electricity bills 
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. It's like they can't afford their daily necessities anymore, so now they're using credit cards to pay for the festive season too! 
I don't think this is a good sign at all. The experts are right, it might be because everyday costs are getting too high. We should really look into ways to help people manage their expenses better, not just borrow more money 
it's like people are using credit cards as an emergency fund lol the bank of england should really help ppl out with some debt relief or somethin 
I mean, isn't it crazy how people are just piling up debt to cope with Christmas spending? 
. Either way, I hope everyone can pay off those debts by next February 
I mean, come on, we can't keep putting off paying our bills till after the holidays, right? But seriously, it's worrying that households are turning to credit to manage everyday expenses. Maybe we need some debt-free holiday tips instead of just more debt 
. I guess it's nice to see people trying to enjoy themselves despite the pressure, but we gotta be real here... credit rates aren't gonna magically drop just because we want them to