Consumer credit ‘has fuelled economy boom’

Rising debt in the UK has been fuelled by the recent economic boom period and associated high consumer spending, according to one body.

The Association of Business Recovery Professionals (R3) says that loan providers have been “tripping over themselves” to lend money out in the past few years.

Consumer debt has grown “significantly” in the last four to five years, R3 spokesman Nick O’Reilly says.

“In fact, the main boom in the economy has been fuelled by personal consumer spending,” he opines.

According to Mr O’Reilly, any period of high consumer borrowing means that there are going to be debts that “fall over” and do not get repaid, something he believes we are seeing more of recently.

In addition, he claims that lenders are not being as rigorous with their credit checks as the market is so competitive.

According to government statistics, there were 26,956 individual insolvencies in England and Wales in the second quarter of 2007.

© Adfero Ltd

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