UK personal debt is “gigantically elevated”

People in the UK are more in debt than their US counterparts, one expert has suggested.

Independent global economist Ian Shepherdson remarked that the years of boom and bust enjoyed previously are unlikely to return because of debt.

He said: “The debt of the British personal sector is currently at about 180 per cent of after tax income.”

The personal debt ratio had hovered around 100 per cent of income throughout the 1990s, but experienced rapid acceleration after this, Mr Shepherdson added.

He explained that this had been sustainable at first due to rising asset prices, but as these began to plummet the UK economy became saddled with a ‘debt curse’.

The remarks were made at the Chartered Institute of Housing Conference and Exhibition in Harrogate earlier this week.

UK personal debt reached £1,459 billion in April 2009, according to advice charity Credit Action. A typical homeowner owed £58,370.

By Francis Finch