Fears about spiralling levels of debt in the UK are likely to be further fuelled by the suggestion that household borrowing is rising at its fastest rate for over a decade.
Figures released by the Bank of England this week show that there has been a troubling trend of people racking up IOUs.
According to the data, the total amount owed on the nation’s credit cards rose to £68.1billion – which amounts to £2,500 per household.
Moreover, the annual increase in borrowing was calculated at 9.7 per cent in the year to April, which is the fastest rise recorded since the start of 2006.
This week, one prospective MP described the situation as a “time bomb” and warned there could be consequences for the wider economy if something is not done to dissuade people from taking on potentially unmanageable levels of debt.
John Mann, the Labour candidate seeking re-election in Bassetlaw, said: “Consumers are being given a false sense of security which will come back to haunt them and the economy.
“This could ruin the chances of the economy coming out of this period of slow growth. There needs to be tighter regulation for these cards which encourage people to mismanage their money.”
There was similar disquiet voiced by former Shadow Chancellor Chris Leslie.
“The cost of living squeeze is making too many households dependent on credit card debt, which represents a serious risk if Britain hits choppy economic times in the next few years,” he said.
“Loading up on the sugar high of unsustainable short term zero rate credit cards risks a crash in tougher times. With inflation rising and real wages stagnant, the Bank of England needs to keep a closer watch on this situation.”
Meanwhile, separate analysis has suggested that London has the highest levels of credit card debt of anywhere in the UK, with young people living in areas such as Wandsworth and Putney driving up levels of borrowing in the capital.
James Jones, from Experian, said: “Today, Britons are more dependent on credit than 20 years ago.
“Our research shows that half of young people can’t afford an unexpected bill or expense without reverting to borrowing or going to the bank of mum and dad.”