Rise in consumer credit borrowing reflects “growing pressure” on household budgets
The Bank of England has today published its latest Money and Credit figures showing consumer credit growth increased to 3.2% in January 2022 from 1.5% in December 2021. The annual growth rate of borrowing on credit cards was 6.2%.
Outstanding balances for consumer credit now stand at £198 billion.
Joanna Elson CBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “Today’s sharp rise in consumer credit borrowing may not on its own be a cause for concern – but taken in the context of rising prices across the board, these figures reflect the growing pressure on many household budgets. Turning to credit to cover essential bills is a sure sign of financial difficulty. With food and fuel prices continuing to rise, and energy costs set to soar, our fear is that many more people will be pushed into difficulty in the coming months.
“Government support announced last month will help a little, but does not go far enough. More help is needed now, including significantly uprating benefits and increasing assistance through the Warm Homes Discount.
“Anyone worried about their finances should seek free debt advice as soon as possible.”