London Daily

Focus on the big picture.
Friday, Jun 12, 2026

UK consumers cautious about their borrowing as inflation mounts

UK consumers cautious about their borrowing as inflation mounts

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.
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.

A survey published by S&P Global on Friday showed reports of rising costs were more widespread among British manufacturers than anywhere else in Europe.

Consumer confidence also last month sank to a record low, according to the long-running GfK survey.

The BoE data also showed lenders increased their mortgage lending in May by the most since September last year,

Net mortgage lending increased by 7.426 billion pounds while new mortgage approvals held roughly steady at 66,163, the BoE said.

The Reuters poll of economists had pointed to a net rise of 4.15 billion pounds in mortgage lending in May and 64,000 mortgage approvals during the month.

($1 = 0.8256 pounds)
Newsletter

Related Articles

0:00
0:00
Close
NHS Trust Secures Funding for AI Tool to Detect Heart Failure Earlier
Government Unveils £4.5 Billion Investment Plan for Walking and Cycling Infrastructure
Nationwide Reports UK House Prices Falling as Borrowing Costs Remain Elevated
Centre for Social Justice Says Two Million Britons Are Using Illegal Loan Sharks
UK Carmakers Warn EU Local Content Rules Could Damage British Manufacturing
UK Government Imposes Emergency Ban on Seven Potent Synthetic Opioids
Royal Navy Completes Major North Atlantic Anti-Submarine Exercise Off Norway
NHS Figures Show Nearly 3,000 Patients a Day Receiving Care in Hospital Corridors
CBI Cuts UK Growth Forecast as Middle East Tensions Drive Inflation Risks Higher
Dan Jarvis Appointed UK Defence Secretary Following Major Government Reshuffle
University College London Study Links Physical Punishment to Higher Risk of Bullying
East Midlands Railway Unveils First Refurbished Train in £60 Million Modernization Programme
RNLI Issues National Water Safety Appeal Ahead of Expected Heatwave
Climate Change Raises Subsidence Risks for Millions of Homes Across Southeast England
Manchester Advances Plans for Underground Piccadilly Station With £1 Million Funding Commitment
Anti-Immigration Violence Continues in Belfast Amid Heightened Security Concerns
UK Law Locks Great British Railways Into Public Ownership
Office for National Statistics Adopts Supermarket Checkout Data for Inflation Measurement
Applied Atomics Launches With $500 Million Space Infrastructure Order Book
BYD Plans Nationwide Rollout of Ultra-Fast EV Charging Network
UK House Prices Unexpectedly Fall in May
CBI Warns UK Growth Is Becoming Increasingly Dependent on Public Spending
Makerfield By-Election Fuels Speculation Over Labour’s Future Leadership
Britain Declines to Join EU SAFE Defence Fund
UK Unveils 2040 Emissions Target Despite Strong Political Opposition
Government Orders Full Review of Palantir’s NHS Data Contract
UK Borrowing Costs Climb as Markets Price in Further Bank of England Rate Rises
Resident Doctors Confirm Five-Day NHS Strike Across England
Violent Anti-Immigrant Riots in Belfast Spark Political and Diplomatic Tensions
United Kingdom Sees Recovery in Horizon Europe Research Funding Share to 9.3 Percent
UK Inflation Holds at 2.8 Percent as Office for Budget Responsibility Flags Persistent Price Pressures
United Kingdom Launches National Anti-Fraud Framework to Combat Rising Pension Scam Losses
United Kingdom Expands Sanctions on Israeli Groups While Funding Palestinian Authority Salaries and Gaza Mine Clearance
United Kingdom Issues Three-Month Ultimatum to Major Technology Firms Over Child Online Safety Controls
United Kingdom Government Moves Toward Blanket Social Media Ban for Children Under Sixteen
Widespread Anti-Immigration Rioting Erupts Across Belfast After Knife Attack Linked to Asylum Seeker
Farmers Warn of Crop Losses Following Months of Unseasonal Rainfall
Civil Aviation Authority Launches Review of Regional Airport Operations
Met Office Issues Heat-Health Alert Across Parts of England
National Grid Introduces New Measures to Protect Winter Energy Supply
Northern England Rail Upgrades Receive Additional Government Funding
Wales Advances Green Hydrogen Strategy to Decarbonize Heavy Industry
UK Expands Recruitment Incentives to Address Shortage of STEM Teachers
High Court Opens Door to Climate Liability Claims Against Major Industrial Emitters
Police Service of Northern Ireland Investigates Major Personnel Data Breach
Defense Ministry Overhauls Procurement System to Accelerate AUKUS Submarine Program
Net Migration Remains Above Government Expectations, New Data Shows
UK and Scottish Governments Agree Framework for Expanded North Sea Wind Development
UK Treasury Launches New Tax Incentives to Boost AI and Semiconductor Investment
Bank of England Signals Continued Caution on Interest Rate Cuts
×