British households significantly increased their reliance on credit in the run-up to Christmas, with new data revealing the fastest annual growth in credit card borrowing for almost two years.
Pre-Festive Borrowing Surge
According to the latest figures from the Bank of England, individuals took on an additional £2.1 billion in consumer credit during November 2025. This marked a notable rise from the £1.7 billion increase recorded in October.
The central bank's snapshot, which covered the month of Chancellor Rachel Reeves's autumn budget, showed a clear split in borrowing methods. Net borrowing through credit cards alone reached £1 billion, up from £700 million the previous month. Meanwhile, borrowing via other forms of consumer credit, such as personal loans and car finance, also edged up by £100 million to £1.1 billion.
Cost of Living Pressures Bite
The annual growth rate for credit card borrowing jumped from 10.9% in October to 12.1% in November. This is the highest level seen since January 2024. Debt charities and economists suggest the figures highlight the mounting pressure on household budgets, even as the annual inflation rate has fallen to 3.2%.
Simon Trevethick of the StepChange debt charity commented on the trend. "For many households, the increase in consumer credit borrowing in November may reflect the reality that everyday costs are becoming harder to manage without turning to credit," he said. He added that the charity's own research found 14 million people would struggle to afford Christmas.
Despite the borrowing surge, other economic indicators painted a mixed picture. Official retail sales data showed an unexpected 0.1% fall in volumes for November, suggesting consumer caution amid pre-budget speculation over tax rises. Furthermore, net mortgage approvals for house purchases dipped slightly, reflecting a slowdown in the property market.
Savings and Spending Sentiment
Interestingly, households simultaneously increased their deposits with banks and building societies by £8.1 billion in November. Some analysts, like Alex Kerr at Capital Economics, suggest this could indicate people reorganising finances ahead of anticipated tax changes.
However, Kerr noted this deposit rise was much smaller than a £20.2 billion increase seen in October 2024. "That suggests nervousness about forthcoming tax rises didn’t put consumers off borrowing in November," he stated. The overall data implies that pre-budget speculation had a limited effect on spending decisions, but also points to little scope for a significant consumer spending rebound in 2026.
