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British consumers are borrowing their way out of the credit crunch while on the continent they are switching to saving, according to a report yesterday by accountants PricewaterhouseCoopers.
Total borrowing reached £1.5tn in the year to September, driven mainly by a 6% growth in unsecured lending on credit cards and loans. PWC said: "Levels of unsecured borrowing in credit-hungry Britain far outstrip those of any established European market." Unsecured borrowing in Britain amounts to 17% of national income. It averages 7% to 13% across the rest of the continent.
The study also shows 20% of British borrowers worried about the future availability of credit with almost 30% concerned about their ability to repay debts. Worryingly the 16% of consumers responding to a recent PWC credit confidence survey were already struggling to repay their debts. The firm said it noticed a switch from planned lending using loans and mortgages to unplanned lending on credit cards and overdrafts.
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