Millions of Britons will fall into financial difficulty this month, charities have warned, as official statistics showed consumer credit borrowing has now reached £205.8bn.
The Bank of England’s latest Money and Credit data shows a slight slowdown in the growth of consumer borrowing, but outstanding consumer credit balances have reached levels that some commentators doubt are sustainable.
The central bank stated that the annual growth rate of consumer credit slowed to 9.1 percent in November last year, the lowest rate since December 2015.
Mortgage approvals rose marginally while secured net lending remained stable in November at £3.5bn, broadly in line with the average seen since 2016.
Outstanding credit card balances reached £70bn in November and the remaining £135.8bn of the £205.8bn total comprised unsecured loans and advances.
Jo Elson, chief executive of the Money Advice Trust, said: “We know from our own research that millions of Britons expect to fall behind with their finances this January as a result of Christmas spending.
“With this in mind, such high levels of consumer credit remain a concern as households struggle to make ends meet, with rising living costs and wages unable to keep up.”
Peter Tutton, head of policy at StepChange Debt Charity, said “While the rate of growth may have slowed, the outstanding amount of borrowing taken on by households continues to grow at a rapid pace.
“We know that millions of people are already using credit just to get by; while wages falling behind inflation risks leaving many more families vulnerable to debt. Helping the millions of households living on a financial knife edge must be a priority for public policy.”