Spending on UK credit cards hit an all-time high in July according to new figures from the trade body for UK banking and financial services UK Finance
The figures show credit card spending totalled £12 billion in July – the highest on record, an increase of 8.2% on July 2018.
The findings may fuel fears that the UK economy is being propped up by an unsustainable consumer spending bubble. Consumer spending has been a key driver of GDP growth in recent years but have been spending more than they earn.
Data published earlier this month showed that UK wages were growing at the fastest pace in 11 years, which may help to ease pressure on consumer finances.
The report also noted that credit card repayments also hit a record high in July, ‘showing that consumers are managing their finances effectively overall.’
Overall, credit card borrowing grew by 3.8% in the year to July 2019. Personal loans and overdraft spending also rose in the month, by 9.3% and 1.7%
The report also showed that mortgage lending grew by 2.9% to £26.1bn in July and the main high street banks approved 95,126 mortgages, the highest number since July 2009. Home purchase mortgages rose by 16.4%, remortgage approvals rose by 19.4%, and approvals for other secured borrowing were up by 12.7%.
The findings are based on data from Barclays, Lloyds, HSBC, RBS, Santander UK, TSB and Virgin Money, as well as Bank of England data.