British consumers increased their borrowing less than expected in May in a sign of caution among households as inflation rises, Bank of England data showed.
Lending to consumers rose by 844 million pounds ($1.02 billion) in net terms, well below the 1.3 billion pounds increase expected and from 1.377 billion pounds in April.
“With interest rates rising and wage pressure from inflation intensifying further, we expect borrowing to be low for the rest of the year,” said Nicholas Farr, economist at Capital Economics.
Bank of England governor Andrew Bailey said it was “very clear” that Britain’s economy is at an inflection point and is starting to slow down.
Inflation has topped 9% and is expected to reach above 11% in October when electricity bills rise again.
The IMF and OECD estimate that Britain will be hit harder by rising prices than other countries.
The BoE data also showed that banks increased mortgage lending in May, at the fastest pace since last September.
Net mortgage lending increased by £7.426bn while new mortgage approvals were flat at 66,163.
Source: Capital
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