Consumer debt 'will top ?1,000bn' this month

Britons are increasing their debts by ?1m every four minutes, Bank of England figures showed today.

Neither rises in interest rates over the past year nor the threat of further increases in the future have managed to dampen consumers' appetite for borrowing. During April the amount owed through mortgages, credit cards, overdrafts and loans rose by ?11.13bn to hit ?984.81bn, putting consumers on track to owe a ?1,000bn by the middle of this month.

Mortgage lending rose by a record ?9.8bn during April, increasing the likelihood that the Bank of England's monetary policy committee will raise interest rates again when it meets next week. Experts are predicting that rates will reach 5.25% by the end of 2004.

However, the value of all secured loans approved in April was ?26.1bn, a drop of ?0.5bn on the previous month's total. Slightly fewer loans were approved for house purchases, too, as 124,000 mortgages were given the go ahead in April, compared with 127,000 in March.

Meanwhile, consumer credit, including personal loans and credit cards, hit a new high of ?18.1bn, an increase of ?1.3bn, slightly weaker than that seen in March.

Commenting on the figures, the Liberal Democrat Treasury spokesman, Vince Cable, said: "Britain's personal debt will top ?1 trillion [?1,000bn] in the next 10 days - and is increasing at ?1m every four minutes.

"Rising lending by banks and building societies is recklessly fuelling the housing boom. If oil prices stay high, inflation and interest rates could rise, causing serious difficulties for many people."