Consumer borrowing has seen the largest increase since before the financial crisis. The levels of borrowing have increased by £1.2bn from February to March, a report from the Bank of England states.
Unsecured borrowing saw the biggest rise i.e. overdrafts and cash loans.
In fact, of the £1.2bn rise, £1.1bn was accounted for by unsecured borrowing such as this.
This figure is now higher than it has been since February 2008. This is not reflected in the level of credit card and mortgage lending, which has remained constant.
From February to March credit card spending went up by just £200m and the number of mortgages approved fell slightly in this time.
One of the most likely causes of this big spike in consumer borrowing is that interest rates remain extremely low.
This increase in consumer borrowing has many people worrying that people will once again become bogged down with debts that they cannot handle.
“March’s sharp rise will likely fuel concern that consumers will pile up debt again to fund spending,” stated the chief economist for IHS Global Insight, Howard Archer.
However, the Insolvency Service has stated this week that personal insolvencies are at their lowest since 2005.
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