UK consumers increase borrowing at fastest pace in 5 years

LONDON, Nov 29 (Reuters) – British consumers increased the pace of their borrowing by the most in five years in the 12 months to October, according to Bank of England data published on Wednesday which underscored the impact of the higher cost of living on households.

Consumer credit grew by 8.1%, the most since the 12 months to October 2018, the data showed.

“Some of this might be because the cost of living crisis has forced some households to borrow to fund necessary spending,” Paul Dales, chief UK economist at Capital Economics, said.

Net borrowing by consumers of just under 1.3 billion pounds in October suggested higher interest rates were yet to significantly crimp spending by individuals, Dales said.

The BoE also said lenders approved 47,383 mortgages for house purchases last month, the most since July but still much lower than before the sharp rise in mortgage costs a year ago.

Economists polled by Reuters had expected a smaller increase to 45,000 approvals.