UK credit card borrowing surged at its fastest annual rate in nearly two years in November, according to the Bank of England, as households sought to finance the escalating costs of Christmas. This surge comes amidst a backdrop of rising living costs and a cautious consumer landscape. The central bank reported a £2.1 billion increase in consumer credit borrowing, up from £1.7 billion in October, with net borrowing through credit cards reaching £1 billion, a significant jump from £700 million the previous month. Other forms of consumer credit, including car dealership finance and personal loans, saw a £100 million increase to £1.1 billion. The annual growth in credit card borrowing accelerated from 10.9% in October to 12.1% in November, the highest rate since January 2024. Experts attribute this to the critical pre-Christmas shopping period and mounting living cost pressures. StepChange debt charity's Simon Trevethick noted that the increase in consumer credit borrowing reflects the challenge of managing everyday costs without resorting to credit. The festive season's financial demands are a concern, with 14 million people struggling to afford Christmas, according to Trevethick's polling. Despite a recent fall in the UK's annual inflation rate to 3.2%, prices remain elevated compared to recent years, and consumers are paying more for festive treats. This trend is in contrast to the late 2025 reluctance to spend, driven by tax speculation in the chancellor's budget. Official figures revealed a 0.1% drop in retail sales volumes in November, and a KPMG study highlighted economic health concerns as a barrier to consumer spending. However, the growth in consumer credit could signal an early boost in household confidence to borrow for spending. Interestingly, households increased their bank and building society deposits by £8.1 billion in November, a significant rise from £6.7 billion in October, suggesting a shift in financial behavior. This increase, however, is smaller than the £20.2 billion surge in deposits before the chancellor's first autumn budget in 2024, indicating that tax concerns did not deter borrowing in November. Overall, the data suggests that speculation about tax increases did not significantly impact household spending decisions, and consumer spending in 2026 may not see a substantial boost.
