Britain’s debt levels are dangerously high and are damaging the economy, according to one of the world’s leading financial watchdogs.
Debt in the UK grew faster than in any other major economy in the last decade to £180,000 per household.
It means the country is in the danger zone following a ten-year borrowing binge under the last Labour government, a hard-hitting report from the Bank for International Settlements has revealed.
Its chief economist, Steve Cecchetti, said: ‘Beyond a certain level, debt is bad for growth. At low levels, debt is good. It is a source of economic growth and stability. But at high levels, private and public debt is bad, increasing volatility and retarding growth.’
The BIS said government, corporate and household debt in Britain jumped from 223 per cent of gross domestic product in 2000, or £2.18trillion, to 322 per cent, or £4.68trillion, in 2010. That is the equivalent of £180,000 per household.