A rise in the scale of British consumers’ distressed borrowing has been forecast by an economic expert.
Howard Archer, chief UK and European economist at Global Insight, is convinced that an increasing number of people will be forced to spend on credit because of the extent of their money problems.
Paying off household bills, buying food and meeting mortgage repayment demands is set to become a real struggle for many families and as a result some will cover their expenses by borrowing, Mr Archer maintains.
"Rising debt levels, low household savings rates and lower equity prices mean that there is a pressing need for many consumers to improve their finances," he said.
Mr Archer’s comments came in response to figures released by the British Bankers’ Association (BBA) that showed credit card borrowing increased over the course of last month.
The BBA’s latest data also revealed that approvals for mortgage deals were down more than 50 per cent last month compared with May of last year.