Credit card spending surges ahead of Christmas as households lean on borrowing

"Britons turned to their credit cards at the fastest pace in almost two years in the run-up to Christmas and November's Budget, even as signs emerged that households were becoming more cautious elsewhere. Data from the Bank of England shows that outstanding credit card balances rose to nearly £78bn in November, up 12.1 per cent on the same month last year."

"Other indicators painted a more mixed picture of consumer health. Figures from the Office for National Statistics showed retail sales slipped by 0.1 per cent in November and remained around 3 per cent below pre-pandemic levels, suggesting shoppers remain cautious overall. Barclays has estimated that spending on Boxing Day sales fell sharply, with consumers expected to spend £3.6bn, down from £4.6bn a year earlier, as households continued to prioritise essentials over discretionary purchases."

Outstanding credit-card balances rose to nearly £78bn in November, up 12.1% year-on-year, the sharpest annual increase since early 2024. The increase likely reflected festive spending on gifts, food and drink and may also indicate growing reliance on borrowing to cover rising living costs. Retail sales slipped 0.1% in November and remained about 3% below pre-pandemic levels. Barclays estimated Boxing Day spending fell to £3.6bn from £4.6bn a year earlier, as households prioritised essentials. Mortgage approvals dipped marginally to about 64,500 in November while average mortgage rates ticked up slightly to 4.2%.

Read at Business Matters