Consumer credit borrowing slowed in December 2025

Net borrowing of consumer credit by individuals fell to £1.5 billion in December, down from £2.1 billion in November, according to the Bank of England's Money and Credit release published on 30 January 2026¹. Within that total, net borrowing through credit cards was £0.7 billion, down from £1.0 billion in November, and net borrowing through other forms of consumer credit such as car dealership finance and personal loans fell to £0.8 billion from £1.2 billion¹.

The annual growth rate for all consumer credit was unchanged at 8.2% in December. The annual growth rate for credit card borrowing rose to 12.4% from 12.1%, which the Bank says is the highest since January 2024, when it was 12.5%. The annual growth rate for other forms of consumer credit was unchanged at 6.4%, the highest since September 2024, when it was 6.6%¹.

Rates on consumer credit moved in different directions. The effective interest rate on interest-charging overdrafts fell by 25 basis points to 21.32% in December. The effective rate on new personal loans to individuals rose for the fifth consecutive month, to 8.78% from 8.68%. The effective rate on interest-charging credit cards fell to 21.56% from 21.60%¹.

Mortgage borrowing was flat over the month. Net borrowing of mortgage debt by individuals was unchanged at £4.6 billion in December, with gross lending down £0.5 billion to £23.0 billion and gross repayments down £0.6 billion to £18.8 billion. The annual growth rate for net mortgage lending was unchanged at 3.4%¹.

Source: Bank of England, Money and Credit, December 2025¹. The November approvals figures are derived from the reported monthly changes.

The effective interest rate on newly drawn mortgages fell to 4.15% in December from 4.20% in November, while the rate on the outstanding stock of mortgages rose to 3.92% from 3.90%¹.

Households deposited an additional £4.8 billion with banks and building societies in December, down from £8.8 billion in November. That included £5.2 billion into ISAs and £5.1 billion into interest-bearing sight deposit accounts, offset by withdrawals of £1.8 billion from non-interest-bearing sight deposit accounts and £0.1 billion from interest-bearing time deposit accounts¹. The effective interest rate paid on individuals' new time deposits fell to 3.76% from 3.81%, while the rate on the outstanding stock of sight deposits was unchanged at 1.75%¹.

Why it matters for households

The figures describe how much households borrowed and saved in December, not what any individual pays. Consumer credit covers borrowing such as credit cards, personal loans and car dealership finance, and the monthly net figure is the difference between new borrowing and repayments across the whole household sector, so a fall means less was added to outstanding balances than in November¹.

The annual growth rates matter for the stock of debt rather than the monthly flow. Credit card borrowing growing at 12.4% a year is the fastest since January 2024, even though net card borrowing in December was lower than in November¹. The effective rates reported for December are averages across products and lenders: 21.56% on interest-charging credit cards, 21.32% on interest-charging overdrafts and 8.78% on new personal loans¹.

For mortgage holders, the average rate on new mortgages fell to 4.15% while the average rate on the existing stock edged up to 3.92%, reflecting the difference between loans taken out recently and those agreed earlier¹. Mortgage approvals, which the Bank treats as an indicator of future borrowing, fell for house purchase and rose for remortgaging¹.

What happens next

The Bank of England's next Money and Credit release is due on 2 March 2026¹. The release does not set out any policy decisions or changes to rules on consumer credit.