UK Consumer Borrowing Rises by Most Since November 2023
LONDON: Consumer borrowing in the United Kingdom increased sharply last month, marking the largest rise since November 2023, according to the latest official data.
As a result, economists believe households are relying more on credit to manage rising living costs.
Credit Card and Loan Demand Grows
Data shows that credit card borrowing and personal loans recorded notable growth. In particular, consumers turned to short-term credit to cover everyday expenses.
Meanwhile, mortgage borrowing also saw moderate improvement, supported by easing inflation pressures.
High Living Costs Drive Borrowing
Analysts say high food, energy, and housing costs continue to strain household budgets. Therefore, many families are using borrowing to maintain spending levels.
However, experts warn that rising debt could create financial stress if interest rates remain elevated.
Impact on UK Economy
The increase in borrowing suggests consumer confidence is stabilizing. At the same time, it raises concerns about long-term debt sustainability.
Consequently, policymakers are closely monitoring household credit trends.
What This Means for Interest Rates
The Bank of England may view the borrowing rise as a sign of economic resilience. Still, officials remain cautious about cutting interest rates too soon.
Therefore, future rate decisions will depend on inflation and spending data.
Conclusion
UK consumer borrowing has climbed to its highest level since November 2023. While the trend shows economic activity picking up, experts caution against excessive reliance on credit.
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