Lending to consumers in Britain swelled in February, the most in five years, the Bank of England (BoE) announced Tuesday (March 29).
The rise was fueled by credit card borrowing as consumers charged 1.9 billion pounds ($2.5 billion) last month. Of that number, 1.5 billion pounds ($2 billion) was new lending on credit cards. That’s the largest rise since the BoE began keeping records in 1993.
Analysts said the surge of borrowing could be a sign that the cost of living is putting the squeeze on households.
Earlier this month, PYMNTS reported the latest inflation reading by the U.S. Department of Labor through its Consumer Price Index (CPI), found that prices are rising at a rate not seen since the early 1980s.
Read more: Latest Inflation Data: Paycheck-to-Paycheck Consumers Will Have to Make Tough Choices
Even stripping out the impact of energy and food prices consumer inflation was up 6.4%, annually last month, up from 6% in January.
As home prices continued to rise, the BoE data revealed mortgage approvals and the total value of secured lending was weaker than expected. Mortgage lenders approved 70,993 mortgages last month, down from 73,841 in January.
Still, the central bank of the United Kingdom said the February numbers were well above the 12-month pre-pandemic average up to February 2020 of 66,700.
The actual interest rate paid on new mortgages rose by 1 basis point to 1.59% in February.
There was some good news for consumers.
The BoE reported the effective interest rate paid on individuals’ deposits with banks increased by 10 basis points to 0.77%.
On the corporate side, large companies borrowing from banks rose to 4 billion pounds ($5.3 billion) in February. Small and medium-sized businesses (SMBs) repaid 0.5 billion pounds ($657 million).
During the same period, private non-financial companies redeemed 4.1 billion ($5.4 billion) in net finance from capital markets.
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