LONDON (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 highest rate since February 2020.
The increase in borrowing came despite business surveys showing signs of a marked slowdown in demand, particularly among consumer-facing companies.
“Growth in credit card borrowing remained at double digits in April, perhaps indicative of some households smoothing their consumption against the backdrop of lower disposable incomes,” said Karim Haji, head of financial services at accountants KPMG UK.
The survey also pointed to a possible slowing of Britain’s housing market, which has seen rapid increases in house prices over the past two years.
Lenders approved 65,974 mortgages in April, the smallest total since June 2020 and down from 69,531 in March, the BoE said. A Reuters poll of economists had pointed to approvals of roughly 70,000.
“Higher rates and falling real incomes are likely to dampen demand after a period of loose monetary policy,” Haji said.
(Reporting by Andy Bruce; editing by David Milliken)
