Lending to consumers slows as credit card borrowing falls amid Brexit uncertainty

Lending to British consumers grew at its slowest rate in four years in December, as credit card borrowing fell sharply in the run up to Brexit.

Annual consumer credit growth slowed to 6.6 per cent, the Bank of England said.

Credit card borrowing was “particularly weak”, the bank said, and households put more money into savings accounts instead.

EY Item Club economist Howard Archer said Brexit uncertainty had created a reluctance to borrow, which was likely to continue.

He said: “Heightened concerns over Brexit and the economic outlook, the very low household savings ratio and the prospect of gradual interest rate rises over the coming months are likely to limit consumer willingness to borrow.”

Mortgage approvals also fell slightly to 63,793 in December, to a new eight-month low, and a signal the housing market has further slowed.

Pantheon Macroeconomics analyst Samuel Tombs said the figures showed that the “unsecured borrowing boom was over.”

He said consumer spending growth was unlikely to slow further due to strong wage growth and falling inflation.

But he said the fall in mortgage approvals was “just the beginning of a sharper decline as the March Brexit deadline draws closer.”