UK households and businesses have been busy binging on credit according to reports in the Times recently. This could well increase the pressure on already indebted households to keep up with their repayments.
According to the Times people are spending their loans on cars, mortgages and business loans which suggests that people are confident enough in the future to take a calculated risk on increasing their debts.
This confidence however may be misguided considering the likely impact of the Brexit vote which is already starting to have an impact on the manufacturing sector. Firms are beginning to lay off staff as orders have been sent tumbling.
The value of sterling has also been hit, which is good news for exporters, but not so good for the many Brits who have booked a holiday this year.
Figures released by the Bank of England reveal that unsecured lending to households increased by 9.1 per cent in the past 12 months. This was the biggest increase for a decade.
While consumers don’t appear to be afraid of a lot at the moment, business owners will no doubt be watching events carefully in the coming months to see what will happen in the event Britain votes to leave the EU.