Defaults on credit cards and other loans have hit the highest level since the financial crisis as British households struggle to make ends meet.
In a sign of mounting financial stress, the Bank of England said its gauge measuring default rates on ‘unsecured’ borrowing was higher in the second quarter of the year than at any time since 2009.
The central bank’s survey of lenders also found a further rise is expected over the summer.
But as default rates on unsecured loans rise, there has been little change on ‘secured’ lending, with households in difficulty tending to prioritise mortgage repayments over credit cards and other loans.
The report underlines the strain as unemployment rises, job opportunities fade and inflation remains stubbornly above the Bank’s 2 per cent target.
