Our economy is a house of credit cards

Since 2000, there have been 240,000 personal insolvencies in England and Wales. Put another way, since the millennium, more than one household in every 100 has been directly affected by the consequences of excessive debt.

In one sense, the debtors only have themselves to blame. Those left to pick up the pieces at the big insolvency practices are clear that the phemonenon is not simply the result of poor people trying and failing to make ends meet. In many cases it is the result of avarice; consumers who want it and want it now. They borrow, pay off a bit of what they owe, borrow a bit more, and before they know where they are they're up to their necks in debt. Some of them go to the wall owing £150,000 in unsecured debt - that's not a mortgage, but personal loans and credit card debt.

Over the last few months, there have been tentative signs that the mood has started to change. More and more consumers are doing the sensible thing and paying off their credit card accounts in full at the end of the month rather than pay usurious rates of interest. Consumer spending is likely to be weak this year as a result, with the hangover from the Christmas binge already evident.

The irony is that consumer spending accounts for two thirds of GDP, and if it weakens, the Bank of England will come under great pressure to cut interest rates, thereby threatening to start the whole debt cycle off again by making it more attractive to borrow.

This, of course, is the opposite of what is needed. What's needed is government pressure on lenders to tighten up the supply of credit, because in the end Britain's credit junkies are no different from other addicts: they need help from themselves.

Brandes awareness

American investment group Brandes has added another name to its already long list of substantial holdings in underperforming UK companies. The secretive California-based investor, it emerged yesterday, has acquired a 3% stake in BSkyB, a group whose share price is forever dogged by UK investors' mistrust of the ruling Murdoch family.

Brandes regularly pops up where other investors fear to tread. In its portfolio of Britain's corporate problem children are Compass (6%), Trinity Mirror (3%), ITV (7%), Invensys (19%), Wm Morrison (13%) and French Connection (4%). The investment group is on a mission to detect "value" and has also sniffed opportunity at HMV (9%), where private equity group Permira is now considering a bid. Other holdings include Corus, Royal & SunAlliance, ICI and 12% of J Sainsbury.

The group's head of European investments, Amelia Morris, came to the attention of the City when she was piling into Marks & Spencer at the same time as other investors were heading for the exit. She built a stake of more than 15%, much of which was picked up at less than 300p a share. With the price now over 500p, Brandes has turned a whopping £500m paper profit on its M&S adventure. In recent weeks Ms Morris has started to convert some into cash, although she still holds 13.3% of M&S. It was a smart move and a lesson in contrarian strategy. Such is Brandes' reputation that BSkyB closed up 8.5p at 505p.

But Ms Morris was also lucky. Those who dub her the San Diego Superwoman are apt to forget that she was ready to sell her M&S stake to Philip Green for 400p a share and pooh-poohed Stuart Rose's chances of turning the retailer around. Selling out at 400p would have been very profitable, but would not have created the awesome reputation that now attaches to Brandes.

The new jet set

Busy executives hoping for quality time with their laptops in British Airways' business class are in for a disappointment - the airline is enjoying a surge in holidaymakers willing to pay four figures for a glass of fizz and a flat bed.

On long-haul leisure routes to the Caribbean, traditionally quiet premium cabins have been busier. Those heading for a couple of weeks in the sun are digging deeper for a little bit of luxury.

Just as the middle ground is struggling in retail, the aviation industry is polarising. Value-conscious travellers are willing to lose nearly all "frills" for lower prices, but those wanting a more comfortable experience are increasingly prepared to pay Gucci-style prices.

On long-haul routes, budget airlines such as Scotland's FlyGlobespan and Canada's Zoom are springing up which follow the easyJet model of charging a fee for a headset or a can of Stella. BA, meanwhile, has been anxiously cutting its prices at the back of the plane.

Meanwhile, just as Burberry has found a new, aspirational market, the bling of biz class is pulling in less affluent flyers. The suits could soon be expected to join in a raucous chorus of "Viva España".