The bank has reported that bad debt at Barclaycard, its credit card arm, meant that money owed to it in 2005 surged by 44 per cent to £1.1 billion.
“We’ve started a cycle of deterioration in credit quality in the UK,” commented analyst James Hamilton at WestLB, according to Reuters.
Banks were now treating bad debt and poor credit quality as their “core concern”, he added.
Action has already been taken by Barclays by limiting the amount of credit it would give to customers back in February.
However, it appears that this has not been enough to limit debt, a symptom of what Elen Thomas of National Savings and Investment has called a “growing gap” between the perception and reality of spending.
With debt levels mounting across the UK, analysts expect Barclays to slash credit levels further in a bid to boost profits in the wake of Britons’ failure to repay debt.