Consumer borrowing up in July

According to the Bank of England, the amount of new money being borrowed by consumers soared to more than £1bn in July.

It is the highest figure since March this year, and a big jump on the figure for June.

Consumers borrowed £1.1bn on credit cards and through unsecured loans in July, this compares with £655m in the previous month.

Borrowing on credit cards alone more than doubled over the period.

Howard Archer, the chief UK economist with IHS Global Insight said “It may well be that a significant number of people are borrowing more due to the squeeze on their purchasing power, coming from extended low earnings growth”.

And with borrowing on the increase, more consumers will be vulnerable to interest rate rises.

The first of these is expected at the end of this year or early in 2015.