British consumer borrowing surged to its highest level in two years in November, according to Bank of England data, indicating resilient household demand ahead of finance minister Rachel Reeves’ budget.
Net consumer credit rose by £2.08 billion ($2.79 billion) during the month, exceeding October’s £1.71 billion increase and surpassing all forecasts in a Reuters poll. The rise pushed the annual growth rate of consumer credit to 8.1 percent, the fastest pace since the year to May 2024.
Alex Kerr, UK economist at Capital Economics, said the figures suggest expectations of tax rises ahead of November’s budget did not significantly deter household spending. However, he added that the data also point to limited scope for a further pickup in consumer spending in 2026.
Reeves unveiled £26 billion in tax increases in her November 26 budget, though most measures were deferred.
Meanwhile, mortgage approvals for house purchases edged down to 64,530 in November from 65,010 in October, slightly above economists’ expectations of 64,400.
Separate data from Nationwide Building Society showed UK house prices unexpectedly fell by 0.4 percent in December, leaving prices just 0.6 percent higher year-on-year — the weakest annual growth since April 2024. This contrasted with forecasts for a modest monthly rise and a 1.2 percent annual increase.
Nationwide Chief Economist Robert Gardner said the slowdown partly reflected strong price gains a year earlier as well as the December price drop. He noted that mortgage approvals remain close to pre-pandemic levels and that easing affordability pressures — due to slower house price growth relative to earnings and declining mortgage rates — continue to support buyer demand.
