Growth in U.K. unsecured borrowing slowed in September but remained above the six-month average, new figures showed Monday, as Britons continued to rely on cheap credit to fund their spending amid accelerating inflation.
New consumer credit stood at GBP1.6 billion ($2.1 billion) in September, down from the GBP1.8 billion seen in August, but still above the expectations of analysts polled by The Wall Street Journal, who forecast a sharper slowdown and a reading of GBP1.5 billion.
The Bank of England has previously said that speedy growth in consumer credit represents “a pocket of risk” in an otherwise benign borrowing environment.
The U.K. economy accelerated in the third quarter, according to a preliminary estimate, and inflation hit a more-than five-year high in September, strengthening expectations that the BOE may raise the interest rate as soon as this week.
Analysts polled by The Wall Street Journal expect policymakers to increase borrowing cost by 0.25 basis points to 0.5% when they meet Thursday. This would be the first rate hike in more than a decade.
Source: Dow Jones