CBI: Brits living in debt

News Article - 09 July 2007
Category: Business

Britons are increasingly getting into debt, according to recent claims from the Confederation of British Industry.

People in the UK are "learning to live with higher levels of credit", the organisation's chief economic advisor Ian McCafferty told Channel 4's News at Noon.

"As credit levels rise the impact of a change in interest rates becomes that much greater on monthly repayments," he said.

Mr McCafferty made the statements following last week's Bank of England decision to raise interest rates to 5.75 per cent.

He forecast that consumer spending would begin to show the effects of the latest rate rise by the end of 2007 and called for the Bank of England to keep a long pause before considering notching rates up further to avoid "overkill" on businesses.

"A slower economy later this year would make it unlikely that the recent ability of companies to push up prices will endure," he said last week.

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