- 24
- Apr
Unless Britain curbs its high level of borrowing, the county could be set for an ‘economic downturn’, an industry expert has advised.
Speaking on BBC Radio Five Live’s Wake Up To Money programme, Peter Spencer, chief economic advisor to the Ernst & Young ITEM Club, suggested as levels of personal debt continue to rise, interest rates will also increase.
He said: "The problem is that we are now becoming a little bit too confident and the lenders are relaxing their criteria and we’re all gearing up appropriately.
"Of course that’s great in the short term but for the longer term it does pose risks."
However, Mr Spencer warned that if the nation continues "borrowing to finance consumption", interest and inflation rates will rise and could eventually lead to the property sector witnessing similar problems as it did in the 90s such as negative net equity.
He added that Britain could also experience similar bad credit loan difficulties as the United States is currently undergoing.
Last week, Liberal Democrat spokesperson Vincent Cable suggested that Britain’s culture of debt was an attributing factor to inflation reaching 3.1 per cent, the highest rate in a decade.
Interfinancial providing you with breaking personal Loans news.
Related posts:
