UK consumers cautious about their borrowing as inflation mounts
LONDON, July 1 (Reuters) - British consumers increased their borrowing by less than expected in May in a sign of caution among households as inflation accelerates, Bank of England data showed on Friday.
2022-07-01 19:46:17 - VI News Staff
Lending to consumers rose by 844 million pounds ($1.02 billion) in net terms, a lot less than the 1.3 billion-pounds increase which was the median forecast in a Reuters poll of economists and down from 1.377 billion pounds rise in April.
"With interest rates rising and the squeeze on households’ real wages from higher inflation set to intensify further, we expect borrowing will be weak over the rest of the year," Nicholas Farr, an economist with Capital Economics, said.
BoE Governor Andrew Bailey said on Wednesday it was "very clear" that Britain's economy was at a turning point and was starting to slow.
Inflation has surpassed 9% and is set to peak above 11% in October when power tariffs are due to go up again. Forecasters like the IMF and OECD think Britain will be hit harder by rising prices than other countries.