British consumers borrowed a record amount by credit card in February, prompting one economist to speculate that the economic recovery “is about to shift into gear”.
Data released by the Bank of England showed that individuals borrowed a net £1.5 billion on credit cards, the highest monthly amount since records began in 1993 this is money.
The number was more than three times higher than the average of 400 million.
Meanwhile, the latest fortnightly survey by the Office for National Statistics found that 12% of respondents used credit cards more than usual in the first half of March to cope with increased prices. The proportion rose to 18% among 30 to 49-year-olds and to 21% among tenants.
the financial times Noting that while consumer borrowing is typically viewed as a “measure of spending growth”, inflation is at a 30-year high and consumer confidence is falling, some believe this is a sign that consumers are ” go into debt to maintain their standard of living”.
“The sharp rise in consumer credit in February likely reflects households trying to sustain consumption at a time when real disposable income is falling sharply, rather than on a spending spree,” said Samuel Tombs, UK chief economist at consultancy Pantheon Macroeconomics.
He added that the numbers “suggest that the economic recovery is about to shift gears.”
Thomas Pugh, UK economist at accounting firm RSM UK, agreed, saying the latest figures “suggest consumers are increasingly borrowing to protect their lifestyles from rising inflation”.
However said The guardSome experts believe that the surge in credit card spending following the lifting of restrictions related to the Omicron variant may show renewed consumer confidence ahead of the Russian invasion of Ukraine.
Paul Dales, UK chief economist at consultancy Capital Economics, said: “It is more likely that households had the confidence to borrow and spend a little more and/or were willing to use borrowing/savings to smooth their spending .”
Therefore, Dales predicted, “in the near term, the economy may have a little more momentum than we thought.”
Anti-poverty charities remain concerned. Joanna Elson, chief executive of Money Advice Trust, the charity that runs National Debtline and Business Debtline, said the numbers are “an indication of the underlying challenges facing households in tackling the debt crisis.” rising cost of living“.
Call up Rishi Sunak To provide more help to struggling households, she added: “Our concern is that more people will be pushed into borrowing to meet rising bills, which could create problems later when repayments are due.”
https://www.theweek.co.uk/news/business/956264/uk-credit-card-debt-soars-a-worrying-new-trend Credit card debt rising in the UK: a worrying new trend?