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UK Consumer Strain Intensifies With Rising Debt and Tighter Credit, Threatening Q1 Growth

S&P’s February index registered a weak 44.8.

Overview

  • S&P economist Maryam Baluch warned that low willingness to spend points to a sustained drag on first‑quarter growth.
  • Household borrowing is rising at the fastest pace since July 2025, with 18–24 year‑olds experiencing the steepest increase.
  • Demand for unsecured credit has grown as lenders cut back, marking the sharpest fall in loan availability since August 2024.
  • Official figures show unemployment among 18–24 year‑olds is at its highest since 2020, intensifying financial strain on younger households.
  • UK growth weakened at the end of 2025, with fourth‑quarter GDP up 0.1% and GDP per head contracting for a second consecutive quarter.