One of the top charities in the UK has warned that the trend for paying off debts has now reversed, with more consumers than ever borrowing money.
Credit Action says that analysis has revealed an “aggressive upward trend” in debt, with Brits forced to borrow cash to survive.
The group says that one of the primary sources driving the increase is a surge in mortgage lending, with a rising number of homeowners forced to release equity from their properties in order to pay their bills.
A spokesman for the charity said that research had shown that, until the beginning of 2012, mortgage borrowing had been steadily decreasing since February 2010. However, since January 2012, mortgage debt has slowly increased, following the general trend of rising household debt. The group says a definite pattern of rising debts has established itself over the last six months, further proof that the country is struggling to cope financially.
The price of oil has soared during 2012, a cost which underpins many different industries both directly and indirectly. Oil prices have also been blamed for the rising cost of living. However, the cost of a barrel of oil has dropped in the last few months, but because wage growth has stagnated, many households are still finding it impossible to meet all of their financial commitments.
The Credit Action chief executive, Michelle Highman, said the figures showed that many individuals all over the UK were still finding things “pretty tough” at the moment. She added that the upward surge in borrowing was “clearly a source of concern”.
Although the government has introduced a raft of austerity measures to slash public debt, it has no impact on consumer borrowing. The latest figures reveal that Britain is only second to Japan when the figures for consumer debts are taken into account.