Borrowing rates ‘doubled’ in third quarter

The rate of borrowing among UK consumers doubled during the third quarter of this year, according to figures from Unbiased.co.uk.

Data form the financial comparison service shows that British consumers borrowed around 35 pence for every pound they saved during the most recently assessed three-month period.

With millions of people around the country struggling to become debt free, Unbiased.co.uk is keen to see British consumers take control of their finances and boost the amounts of money they set aside each month.

“Interest rates over the summer were still at a high level of 5.75 per cent and many people will have felt the impact of the credit crunch starting to bite their disposable income,” said David Elms, chief executive of Unbiased.co.uk.

“While the high level of borrowing and a drop in savings for this quarter may come as no surprise, it is a worrying development.”

The Bank of England increased the cost of borrowing five times in the 12 months after August 2006, which added to the debt management pressures faced by credit consumers around the country.