U.K. Consumer Borrowing Surges Most in More Than a Decade

  • Credit surges almost 11% in Nov. from year earlier, BOE says
  • Household spending key to post-referendum resilience so far

U.K. consumers borrowed at the fastest pace in more than 11 years in November, a sign that households continued their spending spree in the wake of last year’s Brexit vote.

Net consumer credit was 1.9 billion pounds, the most since March 2005, according to Bank of England data published on Wednesday. Credit surged almost 11 percent year on year, also the most in more than a decade.

The economy has been unexpectedly resilient following the June referendum to leave the European Union, with growth driven mainly by consumption. Retail-sales growth accelerated through 2016 and the Confederation of British industry said they grew at their fastest pace in more than a year in December.

The better-than-forecast performance prompted the BOE to change its stance at the end of last year to neutral from a previous bias toward easing. Governor Mark Carney says the next move in rates could be up as well as down.

Policy makers nevertheless expect growth to cool this year as inflation fueled by the pound’s decline curbs consumer spending. British clothing retailer Next Plc on Wednesday forecast another tough year after a disappointing Christmas, deepening concern that rising expenses and a Brexit-induced squeeze will pinch the industry in 2017.

The BOE data also showed that there were about 67,500 mortgage approvals in November, little changed from the previous month. Net mortgage lending amounted to 3.2 billion pounds.

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