A credit boom that is close to levels not seen since the 2008 financial crash should set alarm bells ringing in Theresa May’s government, debt charities have warned.
The latest figures from the Bank of England show unsecured consumer credit, which includes credit cards, car loans and second mortgages, grew by 10.8% in the year to November to £192.2bn, picking up pace on the previous month to grow at its fastest rate in more than 11 years.
In September 2008, the month that Lehman Brothers collapsed and the banking crash triggered a worldwide recession, the level of UK consumer credit debt hit a peak of £208bn.
Credit card debts, which accounted for £66.7bn of the total, hit a record high last month as Britons used the plastic to fund shopping as never before in the run-up to Christmas.
The debt charity StepChange said the rise in debt levels would leave thousands of families vulnerable to higher levels of inflation and changes in income from wage cuts, divorce or redundancy.
Its head of policy, Peter Tutton, said: “Levels of outstanding borrowing are approaching the 2008 peak, and the growth rate of net lending is at its highest since 2005. Alarm bells should be ringing.