Credit cards are being stretched in the UK as consumers can’t make ends meet

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Some highlights from this morning's report from the Bank of England on borrowing trends in April:

  • Net mortgage borrowing fell from £6.4 billion to £4.1 billion in April – below the pre-pandemic 12-month average.
  • Mortgage approvals for moves in the next few months fell again from 69,500 in March to 66,000 in April – this is below the pre-pandemic average of 66,700.
  • We borrowed another £1.4 billion in consumer credit, including £700 million on credit cards. It’s the third consecutive month above the pre-pandemic average.
  • Credit card debt was up 11.6% in a year (the highest since November 2005).

Four thoughts.

First, housing is slowing down: a sure sign of recession.

Second, with less mortgage injection of liquidity into the economy the need for more government money is rising.

Third, rising consumer credit suggests growing consumer stress.

Fourth, this is most especially true of the exceptional growth in credit card borrowing. That looks like ends simply not meeting, and the deferral of a crisis to come.

Nothing about this looks good.