30 October 2007
The rate of debt for personal loans in Britain continues to rise, new figures from the Bank of England show.
A total of £216 billion is owed in unsecured loans and on credit cards, a rise of £1.35 billion over the previous month.
Of this rise, the clear majority (£1.04 billion) came through loans - although this figure was itself dwarved by the £9.8 billion rise in mortgage debt.
Coupled with this bleak news for homeowners was the Council of Mortgage Lenders' announcement that it expected the rate of property repossessions to rise by 50% next year.
It is widely thought that the five rises in interest rates over the past year and a half have put the squeeze on borrowers - with the recent turmoil on global stock markets also blamed for banks being less willing to offer credit.
Speaking to the Independent, Michael Saunders at Citi European Economics said: "All this tends to reinforce our view that the economy is set to slow sharply in the coming year, reflecting high private debts, the last year's Bank of England rate hikes, stretched housing valuations, plus the recent tightening in financial conditions".
The total debt level for UK consumers now stands at £1.38 trillion, up by £11.2 billion.