The US economy maintained its upward trajectory after the pandemic, largely thanks to American consumers’ willingness to continue spending. The flipside, however, is that debts are ticking upwards and many are finding it hard to pay their bills.

In its quarterly report released on Tuesday, the Federal Reserve Bank of New York said overall household debt levels increased by 1.3 per cent during the third quarter to $17.29 trillion. Among this, credit card borrowing levels rose by 4.7 per cent to $1.08 trillion.

The bank noted that, over the last year, credit card debt soared by $154 billion, the largest since the data series began in 1999.

With most households feeling the impact of higher prices, more cardholders are carrying debt forward from one month to the next or falling behind on repayments, according to a separate report from the Consumer Financial Protection Bureau.

Meanwhile, inflation in Germany eased to a more than two-year low in October, confirming prior estimates, as falling energy prices continued to act as a drag to rising prices.

Year-on-year inflation in Europe’s largest economy dropped to 3.8 per cent in October, its lowest level since August 2021, according to final figures released on Wednesday by the German statistics office, Destatis.

Year-on-year inflation in Germany dropped to 3.8% in October, its lowest level since August 2021

While the October figure is a marked decrease from September’s 4.5 per cent rise, it is still far higher than the European Central Bank’s target inflation rate of two per cent for the 19-nation euro currency bloc. Destatis’ president Ruth Brand said in a statement that, compared to medium- and long-term figures, Germany’s inflation rate remains high.

Finally, in the UK, a survey by Barclays indicated that British consumers are tightening their purse strings on the upcoming Christmas shopping season, as spending is being impacted by the high cost of living.

The study showed that consumer spending in Britain continues to fall, with card spending increasing by merely 2.6 per cent in October, the smallest increase since September of the previous year. This slowdown is partly the result of softer expenditure on essential items, which dropped from a yearly increase of 4.6 per cent to 3.9 per cent.

The report also puts “slack-filling” in the spotlight, where manufacturers overstate the quantity or weight of the product on the package.

The unusually warm weather also made Britons postpone their purchases of winter clothing, such as coats and jumpers.

This article does not constitute legal and/or financial advice and is being issued for information purposes only by Bank of Valletta plc, 58, Zachary Street, Valletta. Bank of Valletta is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap. 370 of the Laws of Malta).