Consumer lending in Britain swelled in February, the most in five years, the Bank of England (BoE) announced on Tuesday (March 29th).
The rise was fueled by credit card borrowing, with consumers billing 1.9 billion pounds ($2.5 billion) last month. Of that, £1.5 billion ($2 billion) were new credit card loans. This is the biggest rise since the BoE started keeping records in 1993.
Analysts said the surge in borrowing could be a sign that the cost of living is putting pressure on households.
Earlier this month, PYMNTS released the latest reading of inflation from the US Department of Labor via its Consumer Price Index (CPI), revealed that prices were rising at a rate not seen since the start of the 1980s.
Read more: Latest Inflation Data: Consumers Paycheck to Paycheck Will Have to Make Tough Choices
Even excluding the impact of energy and food prices, consumer inflation rose to 6.4% year on year last month, from 6% in January.
As house prices continued to rise, data from the BoE revealed that mortgage approvals and the total value of secured loans were weaker than expected. Mortgage lenders approved 70,993 mortgages last month, down from 73,841 in January.
Still, the UK’s central bank said the February figures were well above the pre-pandemic 12-month average to February 2020 of 66,700.
The real interest rate paid on new mortgages rose 1 basis point to 1.59% in February.
There was good news for consumers.
The BoE said the effective interest rate paid on retail deposits with banks rose 10 basis points to 0.77%.
On the corporate side, large companies borrowing from banks reached 4 billion pounds ($5.3 billion) in February. Small and medium-sized enterprises (SMEs) repaid 0.5 billion pounds ($657 million).
During the same period, private non-financial corporations repaid $4.1 billion ($5.4 billion) of net financing in capital markets.