Consumer debts ‘set to keep rising’

Howard Archer, chief UK and European economist at Global Insight, also suggests that interest rate rises and an increasingly heavy tax burden will add to the debt management difficulties of people across the UK.

Additionally, these factors are likely to outweigh the positive economic impact of Britain’s high levels of employment and strong property market over the course of the next few months, Mr Archer maintains.

“The increased likelihood that interest rates will not only rise to 5.5 per cent in May but could well rise further thereafter will be a source of significant concern to many consumers,” he said.

Rises in the base rate of interest were introduced in August and November of 2006, as well as in January of this year, which each increased the repayment pressures on the million of people facing mounting debt management worries in the UK.