UK consumers ramp up credit card debt and save less despite Covid crisis

Consumer borrowing on credit cards jumped to its highest level in more than a year in November, pushing all forms of household unsecured credit to £1.2bn, according to the latest Bank of England data.

The increase in reliance on loans and credit cards exceeded City forecasts of a £0.8bn rise and beat the £0.6bn average of the previous six months.

 

Analysts said much of the increase reflected a more confident, pre-pandemic pattern of borrowing, but warned that many low income households had become more dependent on loans to cope with an inflationary squeeze on their finances from rising utility bills and the higher cost of the weekly shop.

Households also cut back on the amount of money set aside in deposit accounts to £4.5bn in November, from an average over the previous 12 months of £11.2bn.