Mervyn King, governor of the Bank of England (BoE), has spoken out over mounting personal debt levels.
He said that the increase in the number of people looking for help managing their debts is indicative of a growing social problem.
“The proportion of unsecured debtors reporting their debt as a serious problem has gone up,” said Mr King.
“The number of calls to the National Debt Helpline has risen quite sharply, so I think the signs are that a potentially large social problem, with many households getting into difficulty with their debts, is materialising.”
Concern over debt levels comes as new figures show that the amount of bankruptcies this quarter has shot up by 73 per cent on the same period a year ago.
The amount of people taking out individual voluntary arrangements rose by 142 per cent as people act to take on their debts.
However, the country’s most powerful banker said that he was also concerned that current account deficit stood at four per cent of GDP, saying this needed to be addressed before it affected the nation.
In addition to concerns over current debt levels, Mr King said that he felt house prices were “remarkably high”, meaning that more people could be pushed into debt if prices fall in the future.