Britain’s annual rate of consumer credit growth fell to its slowest rate since March 2015 during November in a further sign of the slowdown in consumer spending since a splurge in the summer.
The total amount borrowed in November was 7.1 per cent higher than a year earlier, according to data from the Bank of England, well below the 10.9 per cent peak two years before.
Statisticians at the central bank wrote that “the extra amount consumers have borrowed each month to buy goods and services has slowed in the second half of 2018. Since July, the average monthly flow of consumer credit has been £0.9 billion, compared with £1.5 billion between January 2016 and June 2018.”
Consumers cut back in the second half of the year after a long hot summer and modest success for the England team in the football world cup helped prompt higher spending.
The amount of money held by households, often an indicator of their appetite for spending, also grew at a slower rate in November than the average over the past six months. Household holding of money increased by £2.5bn, less than the £4.7bn average over the previous six months.
UK consumer borrowing helped to sustain the economy following the Brexit vote as savings ratios collapsed to historic lows, however economists expect the appetite for further spending to diminish as households rebuild their savings and house price growth slows.
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