UK credit card borrowing rose at its fastest annual rate for almost two years in November, according to new figures from the Bank of England, as households took on more debt to cope with the rising cost of Christmas.
In a snapshot covering the month of Rachel Reeves’s closely watched autumn budget, the central bank said consumers borrowed an additional £2.1bn in total consumer credit, up from a £1.7bn increase in October.
Net borrowing on credit cards climbed to £1bn, compared with £700m the previous month. Borrowing through other forms of consumer credit, including car dealership finance and personal loans, also increased by £100m to £1.1bn.
Annual growth in credit card borrowing rose from 10.9% in October to 12.1% in November, the highest rate since January 2024. Analysts said the surge likely reflects households relying more on credit during the crucial pre-Christmas shopping period, as pressure from the cost of living continues.
Simon Trevethick, from the StepChange debt charity, said, “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 added, “The increase could also indicate people borrowing more in preparation for the festive period – our own polling found that 14 million people would struggle to afford Christmas.”
Although the UK’s annual inflation rate has eased back to 3.2%, it remains above the Bank of England’s 2% target, with prices still significantly higher than in recent years. Shoppers also faced higher prices for festive food and treats compared with last year, following a sharp rise in grocery costs.
Consumer spending had been subdued towards the end of 2025 amid uncertainty over possible tax rises in the chancellor’s budget. Official data shows retail sales volumes unexpectedly fell by 0.1% in November, while a separate study by the accountancy firm KPMG found concerns about the wider economy were holding consumers back.
Some economists said the rise in consumer credit could point to a tentative increase in confidence, with households willing to borrow to support spending. At the same time, consumers boosted their savings, increasing deposits with banks and building societies by £8.1bn in November, up from £6.7bn in October.
Reflecting a slowdown in the housing market ahead of the budget, net mortgage approvals for house purchases fell by 500 to 64,500 in November.
Alex Kerr, a UK economist at Capital Economics, said the rise in deposits could suggest households were reorganising their finances in anticipation of tax changes. However, he noted the increase was far smaller than the £20.2bn jump in deposits recorded in October, ahead of the budget.
“That suggests nervousness about forthcoming tax rises didn’t put consumers off borrowing in November,” Kerr said. “Overall, today’s release adds to the evidence that speculation about tax rises ahead of November’s budget didn’t influence households’ spending decisions too much. This also suggests there isn’t much scope for a pickup in consumer spending in 2026.”
