UK’s consumer credit hits 10-year high before economies adjust to the Brexit turbulence

Consumer borrowing grew at the fastest pace in 10 years in the United Kingdom before the world adjusts itself to the upcoming storm that Brexit has created, in a referendum election last week.

Consumer lending expanded 9.9 percent compared with a year ago, the biggest annual increase since November 2005 and up from 9.6 percent in April, data released by the Bank of England showed Wednesday. Consumer lending includes credit cards, overdrafts, personal loans, but not student loans.

These figures add to signs that the British economy was a bit firmer than many expected in the run-up to last Thursday's referendum. However, the result in favor of leaving the EU will cast a pall over consumers' mood, Reuters reported.

In addition, Finance Minister George Osborne attempted to calm markets on Monday, saying that the country needs to cut spending and raise taxes to stabilize the economy after credit rating agencies downgraded its debt. Also, the FM had predicted a cooling of the housing market, a cornerstone of many Britons' wealth, if Britain left the EU.

Moreover, Fitch Ratings reiterated on Wednesday that leaving the EU would exact a significant toll on the economy, hammering business investment. Britain's economic recovery is still heavily reliant on spending by households many of which have been buoyed by strong growth in the value of their homes.

Meanwhile, the BoE said lending to non-financial businesses increased by 2.814 billion pounds, compared with a 176 million pound drop in April.