The party's over. Here comes the bill

It is 2013 and Britain's homeowners are feeling sore. Only those who bought judiciously since the crash of 2004/05 - prompted by higher loan rates - have avoided losses. Thousands are in negative equity and still struggling to pay off extra debts built up during the borrowing binge of 10 years ago, wiping out any hope of saving for retirement.

Unable to keep up payments on multiple debts, many have lost their homes. Lives have been ruined and victims have banded together with lawyers to attempt legal action against lenders. Inspired by consumer actions against the tobacco and food industries, borrowers allege that lenders led them recklessly into overcommitting themselves.

This is all fantasy - for now - but if the new Governor of the Bank of England is right, this week marks the beginning of an unkind decade for the British economy. The trigger could be the quarter point rise in interest rates the Bank is expected to announce this week.

This comes amid increasing concern over levels of personal debt and revelations that fraudulent borrowing and lackadaisical lending are fuelling the rise in house prices. Banks appear openly uneasy about what lies ahead; they are belatedly starting a consumer education campaign to help borrowers deal with debt.

The secret filming by the BBC of mortgage salesmen, including ones working for subsidiaries of Halifax Bank of Scotland, the UK's largest mortgage lender, encouraging people to lie about incomes to get inflated mortgages indicates that management controls in the lending industry are lacking. The banks' regulator, the Financial Services Authority must also have been asleep on the job. Lenders are keeping their fingers crossed that fixed-rate mortgages will save borrowers and the housing market from the horror fantasy outlined above.

Let's hope they are right and that the hangover from the credit excesses of the past few years will not be too severe. We should know soon because the party ends this week.

The Government's attempt to encourage families to save on behalf of their children through the new Child Trust Fund is to be applauded, but setting a cut-off date of 1 September, 2002, for eligibility seems completely arbitrary. Children born after this date can benefit from tax-free investment of up to £1,200 a year, while those born even hours before won't.

No doubt the cost of giving £250 to every child under the age of 18 would be too expensive, but why not instead make the tax-free wrapper of the Child Trust Fund available to all children?