The governor of the Bank of England has warned that the future of the stock market might not run smoothly and that interest rates may be set to rise, causing some concern among consumers, in particular those who have mounting mortgage and credit card debt.
“There is growing evidence that lower income groups, for example, and those who rent (rather than own their homes) have overextended themselves,” wrote senior economist at Norwich Union Stewart Robertson in newspaper Scotland on Sunday.
“Recent announcements from some banks that provisions for bad debts on unsecured loans (i.e. overdrafts, term loans and credit cards) are increasing fit in with this assessment,” he added.
Further anxiety is present concerning the rate of inflation, which the government is aiming to get to just two per cent, something Mr Robertson warned could lead to “the real burden of the debt [staying] with the borrower for much longer”.
Those in debt are being urged not to panic, but to try and make provisions should a collapse on the scale of the 1980s recession happen.