By Andy Bruce

LONDON (Reuters) -Britain’s housing market slowed dramatically in November and people ramped up borrowing on credit cards, according to Bank of England data on Wednesday that underscored the effects of rising interest rates and the cost-of-living crisis.

British lenders approved 46,075 mortgages in November, down from 57,875 in October and marking the lowest level since June 2020, when the housing market slowed to a crawl following the onset of the COVID-19 pandemic.

A Reuters poll of economists had pointed to approvals of 55,000.

Other gauges of the housing market show a sharp slowdown underway after house prices surged by around a quarter during the pandemic.

Mortgage lender Halifax forecast last month that house prices will fall around 8% this year, and BoE interest rates reached 3.5% in December, their highest since 2008 and up from 0.1% a year earlier.

Bond market turmoil triggered by former prime minister Liz Truss’s short-lived tax-cut plans had already caused many lenders to withdraw mortgage offers in October.

The BoE said lending to consumers rose in net terms by 1.5 billion pounds ($1.8 billion) in November – driven by a 1.2 billion jump in credit card borrowing, the largest such increase since March 2004. The figures are not adjusted for inflation.

While in normal times rising consumer borrowing often reflects a growing economy, economists point to soaring energy bills, food prices and borrowing costs as some of the biggest drivers today.

“November’s money and credit figures showed further signs that higher interest rates are dampening activity, particularly in the housing market. And this will be a constant theme throughout the year ahead,” said Ashley Webb, an economist with consultancy Capital Economics.

Economists polled by Reuters mostly say 2023 will be a tough year for Britain’s economy, with the consensus pointing to a 0.9% contraction this year.

($1 = 0.8286 pounds)

(Reporting by Andy Bruce, editing by David Milliken)