Credit card borrowing soars in December


Figures from the Bank of England today revealed that new borrowing on credit cards, loans and overdrafts rose for the first time since June 2009.

Consumer credit rose £52 million in December, which surprised analysts who had expected a £400 million fall.

For the first time since June, borrowing outstripped the amount being paid back by UK consumers.

This was primarily due to borrowing on credit cards which rose by £195 million. However, demand for personal loans and overdrafts remained low, with repayments outstripping new borrowing by £143 million.

The figures came as the Bank also revealed that the number of mortgages approved for house purchase fell in December.

The fall, which was the first in over a year, came as a surprise to many analysts as the housing market recovery has been gathering momentum of late.

Meanwhile, the Bank of England figures come after an upbeat manufacturing survey which revealed UK factory activity rose at its fastest rate in 15 years in January.

The figures will boost hopes that the economic recovery is gathering pace after last week’s disappointing fourth quarter GDP figures.

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