LONDON–Consumer credit growth in the U.K. rose in May at its slowest annual pace for five years, adding to signs the economy lost speed in the second quarter.
The Bank of England said Monday that consumer credit grew at an annual rate of 5.6% in May, the slowest pace of growth since April 2014. Unsecured borrowing fell to 496 million pounds ($629.4 million), net of repayments, down from GBP800 million in April, figures showed, although credit card borrowing rose slightly on the month.
The data suggest consumers trimmed spending in the spring and offer the latest sign that the 2.0% annualized pace of growth the economy notched up in the first quarter won’t be matched in the second. The BOE expects the economy to barely grow at all, as a boost from stockbuilding that powered growth at the start of the year fades.
Sputtering factory output and tensions over trade have prompted central banks including the U.S. Federal Reserve and the European Central Bank to rethink interest-rate plans. Both are now signaling they may opt for a dose of stimulus in the coming months to revive slackening growth.
The BOE, by contrast, has said it expects to gently nudge up borrowing costs in the U.K. over the next two to three years to keep a lid on inflation, but only if the U.K.’s planned departure from the European Union on Oct. 31 goes smoothly.
Write to Jason Douglas at [email protected]
Dow Jones Newswires