Britain borrows more than £11bn
UK consumers amassed over £11.7 bn in debt in the third quarter of this year, research from website Unbiased.co.uk has shown.
According to Unbiased.co.uk, high interest rates combined with ongoing consumer uncertainty over the impact of the credit crunch have led to consumers using savings to pay for their expenditure. The research also revealed UK savings have dropped by over £11bn in this year’s third quarter. This means that for every pound UK consumers saved during the third quarter of 2007, they borrowed 35 pence.
David Elms, chief executive of Unbiased.co.uk, commented: “We have seen a lot of activity in the financial markets in the third quarter of 2007, which marked the beginning of the Northern Rock crisis. Interest rates over the summer were still at a high level of 5.75% and many people will have felt the impact of the credit crunch starting to bite their disposable income.”
He added: “While the high level of borrowing and a drop in savings for this quarter may come as no surprise, it is a worrying development. It is important for people to take control of their finances now to ensure their savings and borrowings remain at a healthy level.”