LONDON—Britons are pulling out their credit cards at a record pace, a new study shows.
The amount Britons borrowed on their credit cards grew at the fastest pace in 11 years in April, according to Bank of England figures.
The report shows that the outstanding amount borrowed on credit cards hit £68.1bn in April, an increase of 9.7% on the previous year and the fastest rate of credit card borrowing growth since February 2006.
“The figures will heighten concerns at the BoE that the rapid increase in credit card borrowing is unsustainable and driven by deteriorating underwriting standards among lenders, which could lead to a crunch if left unchecked for too long,” stated the Financial Times.
CUToday.info has reported similar findings among U.S. consumers. Analysts have reported that U.S. credit card debt is reaching record levels and that the trend may be unsustainable.
British economists said that although additional consumer credit, which has continued to rise at double-digit rates, helped families to smooth the adjustment to higher prices in shops, the rise in debt would not ultimately prevent consumers from reining in spending as real incomes fell, noted the Financial Times.