British consumers slowed the pace of their borrowing in December for the first time in five months, a potential sign that households might be reining in their spending as last year’s Brexit vote pushes up inflation. 
Unsecured consumer lending — borrowing without collateral — rose by a net £1 billion ($1.24 billion) in December — much less than an increase of £1.7 billion forecast in a Reuters poll of economists and down from an increase of nearly £2 billion in November.
Spending by households helped Britain rack up the fastest growth in 2016 among the world’s biggest rich economies, despite the shock of the vote in June to leave the EU.
But the Bank of England (BoE) expects growth to slow in 2017 as rising inflation, triggered by the post-Brexit vote fall in the value of the pound, eats into the spending power of consumers. Net credit card borrowing showed its smallest increase in cash terms since October 2015.
“It may well be that consumers were buying big-ticket items in previous months ahead of increases in prices, but it is very hard to tell from one month’s numbers,” Philip Shaw, an economist with Investec, said.
Previous official data had shown the biggest fall in monthly retail sales in over four years in December, slowing for a second month after bumper sales in October.
Shaw said a sharp fall in the value of the pound against the US dollar after the data might reflect a slightly weaker than expected increase in mortgage approvals in December.
Despite being wrong-footed by the strength of the economy since the referendum, the BoE is expected to keep interest rates on hold until at least 2019 as it sticks to its view that high inflation will hit consumer spending.
A survey published overnight showed households might be starting to scale back on spending as last year’s Brexit vote pushes up inflation.
Tuesday’s figures from the BoE showed that the number of mortgages for house purchase approved by lenders increased to 67,898, a bit below the median forecast of 69,000 in the Reuters poll but still the most since March 2016.
The BoE forecast in November that mortgage approvals would slow to a monthly average of 65,000 over the next six months, and major lenders expect weaker house price growth.
Net mortgage lending, which lags approvals, rose by £3.8 billion in December, the BoE said, stronger than a forecast of £3.3 billion in the Reuters poll.
The BoE also said foreign investors were net sellers of British government bonds for the first time since July after the strongest purchases on record in the previous three months. Net sales totaled £2.97 billion in December compared with purchases of £15.58 billion in November.

Source : Arab News