Millions financially exhausted, but others power on: Bank of England

The annual growth of credit card borrowing rose from 11.5% to 12.2% in November. We withdrew £5.2 billion of easy access cash earning no interest and £1.6 billion from easy access accounts paying interest.

Mortgage approvals for new purchases are down almost 40% since August – before the mini-budget. But we saved £5.4 billion more overall – including ploughing £10 billion into fixed rate accounts.

The Bank of England reported on effective interest rates for November: Effective interest rates – November 2022 | Bank of England

It also issued its money and credit report for November: Money and Credit – November 2022 | Bank of England

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown: “18 months of relentless rises in inflation have left millions of us exhausted. We’re eating into easy access savings, ramping up our card borrowing faster than any time over the past decade, and backing away from the mortgage market. However, the burden of price rises hasn’t fallen equally on all of us, and there are still plenty of people with room to manouvre, who have been making the most of booming savings rates and locking in better deals.

Card borrowing

While we’ve been working hard to cut costs, there are millions of people who can’t see any alternative to make ends meet other than to borrow more cash. We borrowed another £1.5 billion in November, the lion’s share of which was on credit cards (£1.2 billion). It means card borrowing is up 12.2% in a year – the fastest rate of growth of any time in the past decade.

There are two mitigating factors. This is building from a low base – after so much was repaid during the pandemic – so we’re not seeing sky high card borrowing just yet. At this time of year, it’s also likely to include an awful lot of people who use cards to manage particularly expensive months around the Christmas period. However, there are still plenty of people trying to borrow their way through the crisis, and building long-term problems.


We’re plundering our easy access savings, eating into £5.2 billion of the cash that was earning no interest – which is likely to include money sitting in current accounts. We also withdrew £1.6 billion from easy access accounts paying interest and £0.3 billion from NS&I. This will include a significant chunk of cash that some people were able to build up during the pandemic. And while it has made an enormous difference to have these savings to fall back on, when it runs dry, it will leave people with incredibly difficult decisions – and no safety net.

However, not all of this is people desperately spending their savings. Rising prices have hit those on lower incomes hardest, so those on higher incomes – who tend to have more savings and more wiggle room in their budgets – still have the flexibility to save. It means some of this cash has been withdrawn and moved into fixed rate savings to take advantage while rates were particularly high.

October had seen record moves into fixed savings, and November still saw another £10 billion tied up for longer periods. It was brilliant timing, because rates had been pushed up in the aftermath of the mini-budget, and the average new fixed rate was 3.27%. As a result of the flood into fixed rates, the effective rate on outstanding fixed rate savings when added together was 1.36% – up 29 basis points – the largest monthly increase since the previous December when rates started rising.


Mortgage approvals for new purchases fell again –  from 57,900 to 46,100 – the lowest level since June 2020, when socially distanced property viewings had only just restarted. It means that between August (before the mini-budget) and November, approvals were down 40%. This owes a great deal to rocketing rates. The average interest rate on newly drawn mortgages rose 26 basis points to 3.35% in November. However, the shock of the rises also took a toll on sentiment, and while we’re seeing mortgages rates drop back, this is unlikely to be enough to stemn the flow of demand out of the market.”