Runaway inflation pushes up credit card borrowing

CREDIT card borrowing is growing at the fastest rate in 17 years, as runaway inflation drives up prices.

Year on year, credit card borrowing jumped by 13.5pc in January, up from a rate of 12.4pc in December 2022, Bank of England data show.

This was the fastest pace of growth recorded since October 2005.

Overall, consumer credit increased by 7.5pc in January, up from 7.2pc in December.

Individuals borrowed an additional £1.6bn in consumer credit in January, £1.1bn of which was on credit cards.

Paul Heywood, chief data and analytics office at Equifax UK, a credit bureau, said: “The reality of increased costs has likely led many households to dip further into essential reserves.

“These reserves may in turn be supplemented by high-cost, short-term credit options to maintain a certain living standard, leading to a further squeeze on households already facing a real-terms pay cut due to inflation.”