IMF warns that using consumer debt to fuel growth risks crisis

International organisation joins Bank of England in voicing concern over high levels of household borrowing

The International Monetary Fund has issued a warning to governments that rely on debt-fuelled consumer spending to boost economic growth, telling them they run the risk of another major financial collapse.

In a report before the IMF's annual meeting in Washington next week, it said analysis of consumer spending and levels of household debt showed that economies benefited in the first two to three years when households raised their levels of borrowing, but then risks began to mount.

Related: Bank of England warns a consumer debt crisis could cost banks 30bn