Consumer credit borrowing rises to £1.7bn

Latest data from the Bank of England data has shown that consumer credit borrowing rose sharply to £1.7 billion, indicating financial strain on households.

Net consumer credit borrowing by individuals was £1.7 billion in January, up from £1.1 billion in the previous month. Within this, net borrowing through credit cards increased to £1.1 billion from £0.4 billion this was the highest increase since November 2023.

Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) remained at £0.7 billion in January.

Commenting on the data, Richard Pinch, Senior Director, Risk at Broadstone said “Consumer credit volumes kicked off the new year with a bang, with net borrowing through credit cards increasing to £1.1 billion from £0.4 billion – the highest increase since November 2023.

“It suggests that the new year brought some fresh optimism among consumers amid a more positive interest rate outlook.

“However, with cost-of-living pressures still wearing down disposable incomes and April set to see a variety of tax increases that could exacerbate cost pressures for households, it’s vital that lenders support consumers in selecting the most appropriate credit solutions for their personal circumstances.”