According to Mark Carney, the Governor of the Bank of England, there are concerns that consumer spending is being underpinned by debt.
Whilst the economy has done much better then many predicted over the last year since the referendum to leave the EU, there are concerns that the economy is being supported by unsustainable consumer credit. Comparisons are being made to the debt bubble that preceded the 2008 financial crash.
To compound problems for consumers, inflation reached a 4 year high in May. This means that shopping is getting increasingly expensive, forcing people to rely even more on credit to survive. This squeeze in spending is concerning with Brexit negotiations just around to corner.
If inflation continues to rise over the next few months the Bank of England may be forced to increase interest rates. This could have a disastrous effect on the many homeowners who are only just getting by a the moment. It is likely that an increase in mortgage payments will lead to an increase in the number of people seeking debt help.
If you are concerned that you are relying too heavily on credit then contact GB Insolvency today. We will help you to establish if one of our solutions is appropriate for your circumstances.
If interested, you can also read more about the Bank of England’s monetary policy committee at the following link: