​Household borrowing leapt in November as UK consumers spent big on credit cards

By

Nigel TAYLOR

Published
Jan 5, 2022

It appears Britons were either preparing for a bumper Christmas season or offsetting rising prices as borrowing in November, especially on credit cards, jumped to its highest level since July 2020.

With lathe previous year’s festive season a washout due to coronavirus lockdowns, it seems many UK households were determined to make 2021’s Christmas special as net consumer credit rose by £1.23 billion, above the £800 million predicted by economists, according to the latest credit conditions survey by the Bank of England (BoE). 

The largest portion of the growth came from an extra £900 million of borrowing on credit cards.

People who did their Christmas shopping early amid fears of supply shortages are thought to have contributed to the unexpected rise of 1.4% in November’s retail volumes.
There was also a dramatic reduction in savings growth, with household deposit accounts cut to £4.5 billion in November, from an average over the previous 12 months of £11.2 billion.

Analysts said this either reflected confidence among some consumers to spend a higher proportion of their income or showed others on lower incomes were reducing savings to cover higher bills.

Although the rise in borrowing added to data indicating that the economy picked up in the middle of the fourth quarter, the latest figures did pre-date the surge in cases of the Omicron Covid variant.