Britons remain keen to borrow money and spend it on goods and houses, despite the storm clouds lingering over the world economy, a raft of economic data published today suggested.
Fresh borrowing by British consumers nearly doubled in April to reach the highest level since records began in April 1993, the Bank of England said.
Net borrowing from areas such as credit cards and bank overdrafts soared by £1.685 billion, against an £871 million rise in March.
The borrowing figures followed fresh evidence that the domestic housing market is still seeing price rises despite a slowdown in the south-east of England.
The Nationwide Building Society said today that residential house prices in Britain rose 0.8% in May to stand 7.7% higher than a year earlier. That compares with rises of 0.8% and 6.6% respectively in April and is the highest rate of annual house price inflation since January.
Economists said the data suggest consumer demand will help support economic growth this year, helping offset slower demand for British goods abroad, particularly from the US.
The UK's economic growth rate has slowed, to just 0.4% in the first quarter from the final quarter of 2000, equivalent to annualised growth of 1.6%. That is slower than average growth over the past four decades of 2.25%.
The economic data also chimed with figures overnight from the monthly GfK Consumer Confidence Barometer, a snapshot of consumer sentiment in early May, which rose to plus 2.0 from 1.0 in April.
Britain's economy remains, however, at a delicate juncture, and policy makers will be keen to ensure consumer demand is not too strong, creating economic imbalances and forcing up prices.
This concern could limit further interest rate cuts this year, economists said. Britain's nine-member Monetary Policy Committee meets next week and is widely expected to leave rates at 5.25%, on signs economic growth is still chugging along, albeit at a slower rate.
