Households are spending more on credit cards and putting less money into savings amid the cost of living squeeze.
he Bank of England said net consumer credit borrowing totalled Â£1.2 billion in November 2021. The figure includes borrowing using credit cards, overdrafts and personal loans.
The majority of this was due to additional borrowing on credit cards, making up Â£862 million of the total. It was the strongest net borrowing on credit cards since July 2020.
People also deposited an additional Â£4.7 billion into bank and building society and NS&I accounts in November.
This was less than half the average net flow of Â£11.2 billion going into accounts in the 12 months to October 2021.
A consumer boom led by a rapid run-down of pandemic-related savings continues to look very unlikelySamuel Tombs, economist
Soaring energy costs are putting pressure on households, with bills for other everyday purchases also on the rise.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: â€œHouseholdsâ€™ saving rate returned to its pre-pandemic level in November, though this downshift appears to reflect their attempt to sustain real consumption while inflation is soaring, rather than a rapidly strengthening recovery.â€
Mr Tombs said the outlook for inflation in the spring â€œsuggests that households will have to save much less this year merely to sustain their current level of expenditure, given the outlook for falling real disposable income.
â€œA consumer boom led by a rapid run-down of pandemic-related savings continues to look very unlikely.â€
The number of mortgage approvals made to home buyers also fell in November to the lowest level since June 2020.
Some 66,964 mortgages were approved in November 2021, according to the Bankâ€™s Money and Credit report.
While it was the lowest monthly total since June 2020, the figure was still close to the average of 66,700 in the 12 months leading up to February 2020.
A stamp duty holiday had previously prompted a rush of home buyer activity. Stamp duty applies in England and Northern Ireland, and the holiday ended completely from October 2021.
The Bank also said that the typical rate on newly taken out mortgages fell to a new low point of 1.50%, while the typical rate on the outstanding stock of mortgages also fell to a new series low of 2.02%.