the first time in nearly 7 years, UK consumers borrowing less by making net
repayments on their credit cards.
The Bank of England has reported the first monthly fall in credit card debts since July 2013. Households have been reining in their spending. Households are trying to rebuild their finances after a borrowing boom.
The Bank says that around £100m was repaid by consumers in November last year. The yearly borrowing growth rate dropped to 5.7% from 6.1% in October. Consumers have slowed their borrowing on credit cards and cut back on finance deals to purchase a new car.
Borrowing dipped to £600m in November.
With borrowing falling away, November showed the weakest monthly growth in borrowing in six years and sliding below a £1.1bn monthly average since July 2018.
The strength of the UK economy caused some concerns at the end of last year. The slowdown in consumer spending and borrowing before the election was seen as a sign that households were bracing themselves for Brexit.
Sales on the high street slump.
sales fell in November marking the weakest period for sales for more than
a year. Experts said this would be reflected in the weaker growth in consumer
forecast that the UK economy probably stalled in the final three months of the
Archer, the chief economic adviser to the EY Item Club, said:
“There had been signs in the latter months of the year that consumers had become more concerned by the combination of a struggling domestic economy as well as heightened domestic political and Brexit uncertainties.”
Consumers still have around £72.1bn in credit card debts outstanding.
Despite the first net repayment in credit card borrowing for years, the Bank said that consumers still have around £72.1bn in credit card debts outstanding, significantly higher than in recent years. Borrowing has gradually been rising since 2012, when credit card debt hit a post-financial crisis low of around £55bn. Overall consumer borrowing remains above pre-financial crisis levels at more than £225bn.
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