The Guardian view on rising personal debt: more prudence please | Editorial
New figures on business confidence suggest that the one place where the service sector boom is on the ebb is in the consumer sector - hotels and restaurants, gyms and hairdressers. The twin pressures of rising inflation and slowing pay rises are squeezing household incomes. The ratio of personal debt to household income, which fell steadily in the years after the financial crisis, has now again begun to rise. Last week, new figures were published showing February brought the highest increase in credit card debt in 11 years.
The British economy's failure to wean itself off an addiction to growth fuelled by an expanding consumer debt bubble is bad for consumers, and bad for the economy as a whole. It is no substitute for business investment, which the OECD has forecast will fall sharply in future years in a post-Brexit climate of uncertainty. It makes recession more likely, and, when it comes, deeper and longer. The human costs of getting into problematic debt are no less profound: people are a third more likely to develop mental health issues if they find themselves struggling with debt.
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