Britons took on more credit card debt during September than any month since before the Brexit vote as consumers continued to borrow to sustain spending.
Borrowers loaded another £641m onto plastic in the month, the sharpest increase in debt since May 2016, according to Bank of England data published today.
The total credit card debt stock reached £69.4bn, the highest on record.
Total credit card debt had been slowing previously, but the three-month annualised trend in growth shot up from 8.5 per cent in August to 9.3 per cent in September.
The Bank of England has been keeping a close eye on rising lending to consumers, which has far outstripped economic growth in the UK.
The Bank’s economists currently judge that risks to financial stability from the debt build-up are not elevated, but growth in lending has nevertheless caused concern among some economists.
Growth in overall consumer lending, of which credit cards account for just over a third, fell slightly to 9.9 per cent over the year to September, the Bank said today.
“The BoE sees unsecured consumer borrowing as a significant risk to the economy and has warned that banks risk become complacent in their lending behaviour,” said Howard Archer, chief economic adviser to the EY Item Club.
“The latest credit conditions survey did at least indicate that banks are becoming more cautious in their behaviour by making less unsecured credit available to consumers and tightening lending standards.”
The Bank’s lending data also showed that mortgage approvals for house purchases fell by 1,000 to 66,232, the lowest since June, although remortgaging activity rose slightly as homeowners try to lock in low rates.