Consumer Borrowing Rises as Households Increase Use of Credit

UK consumer borrowing increased in July, according to the latest figures from the Bank of England, highlighting the continued reliance of households on credit.

Net consumer borrowing rose to £2 billion in July, up from £1.9 billion the previous month. The increase was driven primarily by personal loans and car finance, which rose from £0.9 billion to £1.1 billion. Credit card borrowing remained significant at £0.9 billion, although this was slightly lower than the £1 billion recorded in June.

Annual consumer credit growth also increased from 9.1% to 9.2%, with credit card borrowing growing at 12.5%.

Borrowing also remains expensive for many households with the effective interest rate on interest-charging credit cards currently standing at 21.45% and rates on new personal loans increasing to 9.86%.

The figures underline the importance of households carefully managing borrowing, particularly where credit is being used to meet everyday living costs. If you are struggling to keep up with your debt repayments and would like to speak to an adviser in confidence, you can call our free telephone helpline on 0800 043 40 50, Monday to Friday, 8am-6pm.