Brits scrambling to get their hands on Christmas presents early to avoid shortages boosted credit card spending to a 16-month high, reveal official figures released today.
Households in the UK took on £1.2bn in net consumer debt in November, the highest level in nearly a year and a half, according to the Bank of England.
Reports of widespread shortages of products in the run up to Christmas caused by ongoing supply chain snarl ups ignited mass buying from consumers in November to ensure they had enough presents to put under trees.
Thomas Pugh, UK economist at RSM, said the uptick in net credit card lending was “driven by earlier Christmas shopping”.
The rise in net consumer lending runs against a trend displayed throughout most of the pandemic in which households used money they would have otherwise spent on activities cut off during lockdowns to pay off credit card debt.
Elevated net consumer credit lending provided further “evidence that consumer behaviour was normalising before the Omicron wave emerged,” said Martin Beck, chief economic advisor to the EY ITEM Club.
Household savings swelled at the slowest pace since January 2020, before the onset of the pandemic.
Despite the upbeat November consumer credit print, experts warned the emergence of the Omicron strain of coronavirus and the imposition of plan B measures tamped down on spending in December.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said a string of real-time data “show that households spent less on services in December in response to the surge in Covid-19 infections”.