Credit card borrowing in the UK soared in November to its highest monthly level since 2004 amid mounting pressure on households from the cost of living crisis. The latest snapshot from the Bank of England showed individuals borrowed an additional £1.5bn in all forms of consumer credit, of which £1.2bn was on credit cards, as concerns mounted over the impact of high inflation on struggling households. Coinciding with the beginning of the Christmas shopping period and rising energy bills, the jump from October’s £700m in unsecured borrowing prompted concerns among anti-poverty charities that some people were turning to expensive forms of credit to make ends meet. Heidi Chow, executive director at the campaign group Debt Justice, said: “Booming credit card borrowing at a time of falling incomes and rising living costs is another warning light on the dashboard that people are becoming more dependent on expensive credit to make ends meet. “Instead of ignoring the signs of a spiralling household debt crisis, the government must take urgent action to write off unsustainable levels of household debt.” StepChange, a debt advice charity, said the steep increase in living costs during the past year was behind most of the debt among its new clients, with more than one in five (21%) saying it was their primary reason for contacting the charity. Richard Lane, the charity’s director of external affairs, said the figures were worrying. “With financial pressures across the board creating problems for an increasing number of households, there is a real danger that people will increasingly be turning to credit to meet essential spending into the new year and beyond.” The Bank’s figures showed a sharp fall in mortgage approvals, reflecting the increase in borrowing costs after successive rate increases from the central bank over the past year, as well as the ongoing consequences of Liz Truss’s ill-fated mini budget. Mortgage approvals to fund house purchases fell to 46,100 in November, down from 57,900 in the previous month and more than 100,000 in November 2020, when a stamp duty holiday was in place. Economists polled by Reuters had expected a more buoyant total of 55,000, despite the turmoil in the housing market after the 23 September mini-budget, which caused a series of lenders to withdraw mortgage products. The central bank said the interest rate paid on new mortgages rose 0.26 percentage points to 3.35% in November, the highest level since 2013, indicating the financial stress on new homebuyers who needed a loan to support their purchase. Samuel Tombs, the chief UK economist at the consultancy Pantheon Macroeconomics, played down the significance of the increase in consumers borrowing on credit cards, saying it “merely makes up for weakness” in the previous two months. He said the stock of consumer credit remained as much as £18.4bn below a peak seen in January 2020, and was worth only about 13.5% of households’ annual income – well down on a pre-Covid peak of 16%. Tombs said it was significant that many households had recently increased their overpayments on mortgage debt – £2.2bn in November and a record £2.5bn in October – while at the same time refusing to spend more than £190bn of savings accumulated in the pandemic, mainly by wealthier individuals. “Households continued to stockpile cash at a faster-than-normal rate in November in response to fears of rising unemployment, higher interest rates and the recent decline in the value of their total financial assets. “The stock of households’ savings now is £196bn above the level it would have reached if they had continued to add to them at the 2018-to-19 average rate since January 2020,” he said.