Last December, consumer spending on Christmas, it has emerged, was the worst Christmas for retailers in 10 years. According to the British Retail Consortium.
Christmas credit card borrowing was down.
Consumers paid back nearly as much as they borrowed during the Christmas period in December. Figures show the lowest level of borrowing since September 2014. With £92m more borrowed than repaid.
This has not eased concerns that many households are still struggling to meet the basic costs of living. They are being stretched beyond their means.
2018 saw a 7 year high in personal insolvencies.
Last week, separate figures were published showing that ‘unmanageable debt’ reached its highest levels in 7 years.
The Bank of England issued its seasonally adjusted figures which showed that £72billion remained outstanding on UK credit cards. This balance rose slightly on the run-up to Christmas.
The Bank described credit card borrowing as “particularly weak” during the December/Christmas period.
There was no evidence that consumers had thrown their credit cards around in November, during discounting events such as Black Friday. That month £348m more was borrowed than repaid, but that was no more than the average for the final six months of the year.
The rate of increase in spending has slowed.
Consumer groups and debt charities suggest that consumers had an eye on what they would need to pay back after Christmas. Consequently, households who are already finding it hard to make ends meet reduced their credit card spending.
This doesn’t mean that General consumer borrowing, which includes loans, overdrafts and credit cards has fallen. It has continued to grow but the rate of increase has slowed.
The annual growth rate stood at 6.6% in December, much lower than the double-digit growth seen in the second half of 2016 and the first half of 2017.
Back then, there was pressure on the Bank to act, and lenders have become more stringent on how they lend money to individuals.
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