Almost every UK household has debts enough to trigger
another UK financial crisis. Analysts view the possibility of a borrowing
bubble caused by low interest rates similar to the 2007 breakdown.
Consumer credit had grown by 9.7 per cent to reach £1.9
billion in March 2016. This parallels the financial crisis of 2007. Britain's
habit of using cheap money to increase debts and fuel spending could burst an
ever-growing borrowing bubble.
With unemployment and poor income growth, borrowers may
struggle to repay their debts. If the economy takes a sudden downturn, it may
mean the start of another fiscal crisis.
Tashema Jackson, money expert at comparison site switch.com,
said: "While rock-bottom interest rates have helped consumers get great
introductory offers and low mortgage rates, it also means the temptation to
borrow beyond our means has seldom been higher.
“Banks and credit card providers have an important role to
play in preventing borrowing spiralling out of control."
Experts said there has already been a rise in the number of
people struggling with debt repayments this year.
Peter Tutton, head of policy at StepChange debt charity,
said: "Consumer credit has again risen rapidly and this is an area of
growing concern.
"Slow wage growth and the rise in insecure jobs have
left millions of households financially vulnerable and we have already seen an
increase in the number of people coming to us for debt advice in 2016."
