UK credit card borrowing soars – Guardian

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Borrowing grew at the fastest rate in 17 years, the outlet reported

UK credit card borrowing accelerated in June at the fastest annual rate since 2005, The Guardian reported on Tuesday, citing data from the Bank of England.

According to the report, borrowing jumped £740m ($836m) month-on-month, up 13% from the same period last year.

Broader consumer credit, which includes unsecured personal loans and overdrafts, hit £1.42bn ($1.65bn), up 6.9% – its biggest year-on-year increase since March 2019. The regulator said borrowing using all forms of consumer credit in June was lower than in the previous month, but remained above the pre-pandemic 12-month average of $1 billion. pounds ($1.16 billion).

Analysts say the rise in borrowing comes as UK households increasingly rely on credit cards to cope with rising prices. They also add that the situation is likely to worsen due to further inflation spikes (10.1% in July) and the threat of higher energy bills during the winter heating season. Last week, UK energy regulator Ofgem predicted the average annual household energy bill would rise to £3,549 ($4,137) from October, an 80% increase on April .

READ MORE: One in four Britons won’t turn on the heating this winter – study

« Friday’s confirmation of soaring energy prices will only have added to the worries of millions worried about how they will make ends meet in the months to come… For many households, however, the options are already running out, with more reliance on credit to cover basic needs. And for those who are already struggling, the situation will only get worse without intervention,Joanna Elson, head of the charity Money Advice Trust, told the media, calling on the government to provide targeted aid to those hardest hit by the cost of living crisis.

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