Small businesses around the UK are losing faith that the current government will act in a manner that promotes their interests.

Many small firms are facing serious money problems and almost 96 per cent now feel to some extent "dissatisfied" with policy makers in London, according to a recent poll by the Federation of Small Businesses (FSB).

In response to its own findings, the FSB has suggested that its members feel that their money problems and operating difficulties are not being taken seriously enough by the state.

"All we see is government consulting big business, with small businesses being left out of the loop," said John Wright, the FSB’s national chairman.

"But small businesses produce over half of UK gross domestic product (GDP) and it is important that their needs are addressed if we are to get through the current economic difficulties."

In August of last year, the accountancy firm Grant Thornton revealed that for the first time the UK’s consumer debt mountain had become larger in scale than its annual GDP.

Personal loan deals are getting more expensive as far as British borrowers are concerned, it has been claimed.

According to a report from research firm Defaqto, the typical cost of taking on a personal loan in the UK is higher now than it was when the base rate of interest was last set at five per cent in December 2006.

In fact, a loan of £2,000 is now on average 3.3 per cent more expensive over the course of 24 months than it would have been 18 months ago.

Many of the UK’s biggest lenders are thought to be tightening their criteria and looking for what Defaqto describes as "better quality business".

"The rejection rate for unsecured loan applicants is higher than it has been in previous years with Nationwide reporting that they’re now declining about 60 per cent of applications," noted the research firm’s principal banking consultant David Black.

A report from the Council of Mortgage Lenders last week suggested that an increasing number of homeowners are opting for fixed-rate mortgage deals in an effort to avoid money problems in years to come.

The Bank of England’s monetary policy committee (MPC) considered whether to hike the base rate of interest when they met earlier this month.

According to the minutes from the committee’s most recent meeting, the threat from inflation was deemed to be such that an immediate base rate increase needed to be assessed.

A rise in the base rate would have been bad news for borrowers around the country and particularly for anyone with debt problems.

Ultimately, however, eight of the nine MPC members took the view that the cost of borrowing should remain at five per cent at least until July.

Howard Archer, chief UK and European economist at Global Insight, said: "The overall impression is that the Bank of England is in no hurry to move interest rates, given the current major uncertainties surrounding both the medium-term inflation and growth outlook."

Figures from the Office of National Statistics recently showed the money problems British consumers are facing as inflation was revealed to have hit 3.3 per cent in May.

Thousands of consumers across Britain are lying to their lenders about how much money they earn on an annual basis, according to a recent study.

Figures from uSwitch.com show that five per cent of people deliberately mislead the lender they are applying to in order to gain access to more credit than they might otherwise be able to.

Meanwhile, financial service firms are giving out billions of pounds in credit to consumers whose income level they have not had officially checked.

All of which could leave borrowers facing debt management and money problems and lenders having to write off sizeable sums.

"We cannot ignore the fact that consumers have a responsibility to borrow sensibly, but lenders need to help the process and tighten their credit checking procedures," said Simeon Linstead, head of personal finance at uSwitch.com.

Darren Cook from Moneyfacts.co.uk said recently that the days of cheap credit a years away from a return in the UK.

The Conservatives have outlined plans that would aim to curb the apparent excesses of store card credit providers.

Shadow chancellor George Osborne has suggested that the rates of interest charged by store card providers are sometimes too high and that many consumers are unwittingly putting themselves at risk of debt problems by using them.

With this in mind, Mr Osborne told the Which? Annual Awards recently that he would like to see the Office of Fair Trading given powers to clamp down on store card companies whose practices are unhelpful to people with money problems.

"Of course individuals have the prime responsibility to keep themselves out of trouble and businesses should only lend to those who can afford it," he said.

"But government has a role in setting the boundaries and ensuring fair play."

Last week, GE Money reported that one in three British consumers are looking to reduce the amount of cash they spend on a monthly basis.

Borrowers in the UK are paying over the odds for payment protection insurance (PPI), according to the initial assessment of the Competition Commission (CC).

PPI covers repayments when an individual is facing debt problems and is unable to do so themselves but providers are currently overcharging by close to £1.4 billion, the commission has warned.

The issue is that consumers are not being made aware that PPI can be bought from a variety of providers and are instead taking up the option offered by their lender – in many cases at a dramatically increased cost.

"We’ve found serious problems with the PPI market and customers are paying for the lack of competition," said the CC’s deputy chairman Peter Davis.

Earlier this week, a report from MoneyExpert suggested that an increasing number of British consumers with debt management and money problems are concerned about their ability to pay off their arrears.

There will be no reduction in the base rate of interest until August at the earliest, according to one expert.

Howard Archer, chief UK and European economist at Global Insight, is convinced that the inflationary pressures within the British economy will be enough to force the Bank of England to maintain the base rate for the next few months.

A cut in interest rates would be welcome for the millions of Britons experiencing debt problems but Mr Archer predicts that such a move will not be made soon.

However, the economic expert expects to see the base rate begin to move significantly as the year goes on and predicts that it will fall as low as four per cent at some point next year.

"It currently seems highly unlikely that the bank will be prepared to trim interest rates again until August at the very earliest," he said.

According to Credit Action, British borrowers pay out an average of around £3,765 each month to service the interest on their debt management burdens.

Millions of British consumers are making financial cut backs in response to the rising cost of living, it has been revealed.

Research carried out by Alliance & Leicester has found that a majority of people around the country are taking steps to ease their money problems and to protect themselves during the ongoing economic downturn.

Among the most popular courses of action for those looking to improve their financial position has been to find a new credit card provider and a more competitive borrowing deal.

In addition, around seven per cent of the consumers polled said they have consolidated their credit card arrears through a personal loan in an effort to resolve their debt management problems.

"Taking advantage of the best financial deals on the market is always important, but more so in the current environment," said Emma Walkley from Alliance & Leicester.

Meanwhile, a report from MoneyExpert.com recently revealed that fewer people in the UK have been switching their financial service providers in recent months than was the case last year.

Grandparents around the country are digging deep into their pockets to help younger generations deal with their money problems, according to a recent study.

Figures compiled on behalf of the KidStart savings scheme have shown that almost two-thirds of British grandparents regularly use their own cash to offer financial assistance to their children’s sons or daughters.

Millions of young consumers are struggling with debt management and money problems and the latest data suggests that their parents and grandparents are increasingly being asked to help out.

In addition, one in five of the grandparents polled said they had offered financial assistance as younger members of their family raised the cash to buy a car, while one in ten contributed to their housing deposit.

Last week, a report from Birmingham Midshires suggested that the number of people saving money regularly in the UK has risen in recent months despite increases in the cost of living.

Millions of Britons are preparing to tighten their belt and cut back on expenditure, foregoing luxury items in an effort to save money, it has been suggested.

According to Alliance & Leicester, nearly 35 million Britons have made some form of financial cutback to meet the demands of various living costs such as food expenditure, energy bills or debt reduction.

More than a third (34 per cent) of respondents said that they expect their disposable income to be reduced in the coming six months, with 79 per cent attributing this expected drop to the rising costs of food, energy and consumer goods.

Clothes shopping was said to be the habit most people were looking to cut back on, while some 36 per cent of people said that they expected to socialise less in the coming months.

Emma Walkley, current account manager at Alliance & Leicester, said: "many of us are feeling the pinch and looking for ways to cut back. The good news is that people are taking action now and looking at ways of making their money go further."

In March, Alliance & Leicester noted that debt reduction and other financial matters were becoming a prominent topic of conversation among friends, families and colleagues.