Bank of England data show credit card lending rose 1,5 1.5 billion £ in February to ,5 59.5 billion – the highest since records began in 1993 – pushing out total unsecured loans by 90% compared to the previous month to 9 1.9 billion. The central bank said the rise boosted the annual growth rate for all forms of non-performing loans from 3.2% to a two-year high of 4.4%, raising the overall balance of consumer credit to 199 199.5 billion. With shoppers turning to cheaper supermarkets like Lidl and Aldi to make ends meet, and a growing number of families saying they have to choose between food and heating, anti-poverty charities have said they are more concerned about consumer spending. on credit cards. Joanna Elson, chief executive of the Money Advice Trust, the charity that runs the National Debtline and Business Debtline, said the data provide “an indication of the underlying challenges households face in meeting the rising cost of living” as she called on the chancellor. provide more targeted assistance to households under severe pressure. “Our concern is that more people will be pushed into credit to cover growing bills, which could create even lower problems when it comes to repayments,” he said. Liberal Democrat Treasury spokeswoman Christine Zardin said it was not surprising that households were turning to credit cards when the government added “real cuts in household incomes with hidden taxes and failures and failures.” ». “More and more people will have no choice but to turn to credit cards, massively increasing their long-term costs, just to make ends meet,” he said. Some economists have suggested that the rise in credit card spending, which followed the lifting of restrictions on the Omicron variant, has shown renewed consumer confidence ahead of Russia’s invasion of Ukraine. Paul Dales, UK chief economist at consulting firm Capital Economics, said: “Households are more likely to have the confidence to borrow and spend a little more and / or be willing to use lending / savings to balance expenses. their”. However, Samuel Tombs, chief economist at consulting firm Pantheon Macroeconomics, said separate data showing a collapse in consumer confidence between January and March and a sharp slowdown in mortgage lending point to the need for more households. “The sharp rise in consumer debt in February – the largest since April 2018 – is likely to reflect households trying to maintain their consumption at a time when real disposable income is declining sharply, rather than spending spree,” he said. Bank data also showed that consumers backed their efforts to borrow at lower lending rates in February, despite raising the central bank’s key interest rate from 0.1% to 0.5% between December and February. Credit card interest rates averaged 18.26%, down 0.29 percentage points, while standard loans fell to 6.14% from 6.23%. Subscribe to the Business Email daily email or follow the Guardian Business on Twitter at @BusinessDesk The intense competition among mortgage lenders meant that the increase in the key interest rate hardly changed the average fixed rate supply, which rose from 1.58% to 1.59%. Tombs added that the value of “excess savings” rose to 18 186.0 billion from 185 185.7 billion in January, indicating that households were reluctant to run out of savings while the economic outlook was uncertain. The Office for Budget Responsibility, an independent forecaster for the Treasury, has predicted that the UK’s economic growth will be sustained this year and next by consumers spending much of their savings. Tombs said the unsecured credit stock last month was “26 26 billion below the pre-Covid ceiling”, so households without savings should be able to further increase their borrowing. “We continue to believe, therefore, that the economy will avoid slipping into recession for a while this year, despite the bleak outlook for real household incomes,” he added.
