The British consumer’s love affair with credit cards appears to have been revived with official figures showing a sharp increase in spending on plastic last month.

The data reduces the likelihood of the Bank of England cutting interest rates this month.

The Bank reported that credit card debt increased by £733 million in January, far higher than the £200 million increase in December and the biggest rise since January last year.

The post-Christmas credit binge leaves consumers owing a total of nearly £57 billion on their cards – the equivalent of about £1,000 for every man, woman and child in the country.

Total lending, which includes loans secured against property, rose by £10.5 billion, up from £9.6 billion in December. It was the biggest increase since July 2004 and higher than the £9.1 billion average over the past six months.

Further evidence of a resurgent housing market also emerged with the Bank reporting that mortgage lending in January rose by £9.2 billion, the biggest increase since April 2004 - a time when house prices were rising rapidly.

The number of approvals for house purchases - which are seen as a good indicator of future demand - also remained strong, holding steady at 122,000, unchanged from December’s figure, which was the highest since March 2004 and above analysts’ expectations.

But Vicky Redwood at Capital Economics cautioned that the figures did not necessarily mean house price inflation would return to pre-2005 levels.

"Not all households who have agreed a mortgage will move house," she said. "What’s more, this may well turn out to be as far as the rebound in approvals gets, given that overall consumer activity remains weak and the release of pent-up demand following last August’s interest rate cut is probably exhausted."

Other analysts said the upbeat credit figures lent weight to the Bank of England’s theory that consumer spending would help the economy recover momentum this year with economic growth moving above its historic average by the end of 2006.

But many economists still believe the Bank’s growth projections are too optimistic.

They argue that consumer spending will remain subdued and that the Bank will have to reduce the cost of borrowing from its current 4.5 per cent level to boost the economy.

Howard Archer, chief UK and European economist at Global Insight, said: "While consumer credit picked up in January, it was still relatively muted by recent standards.

"Record high debt levels and rising unemployment means that there is an increased need for many consumers to try to repair their balance sheets," he added.

Mr Archer expects the Bank to reduce interest rates by a quarter point in the early summer.