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Consumer debt levels overtake UK output | |||||
| The following is an adaptation of an article appearing in http://www.telegraph.co.uk on 13th February 2006. Debts taken on by British families have overtaken the size of the economy for the first time. People have borrowed so much their total debt outstripped Britain´s gross domestic product over the new year. The landmark came barely 18 months after British household debt passed £1 trillion, and came as bankruptcies have soared to record levels. It will cause consternation at the Bank of England, which last week voted to leave interest rates at 4½%. Bank figures show the combined amount owed by families rose by 10.2% to £1,158 billion last year. This was over £30 billion more than the £1,127billion in economic output generated by the UK in 2005, according to Treasury estimates from the Pre-Budget Report. The rate also dwarfed economic expansion of 1.8% last year. Simon Rubinsohn, chief economist at Gerrard, said this was an "economic iceberg" which could threaten UK growth."This iceberg may not yet be big enough to damage the ship - we are still well afloat - but remains a massive threat," he said. "Unemployment is beginning to tick up, meaning some people will start to find it that bit harder to pay back their debt.´´ However, analysts were reassured that the vast majority of household debt was tied up in mortgages, rather than unsecured debt. For this and other news items please visit www.debtscotland.com . By registering on the site you will find a host of debt recovery and credit control tools in the free credit resources section. Stephen Cowan Yuill & Kyle, debt recovery & credit control lawyers, Scotland 79 West Regent Street, Glasgow G2 2AR scowan@yuill-kyle.co.uk Direct Dial: 0141-572-4251 www.debtscotland.com www.ykcreditcheck.co.uk | |||||
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