Trillion-pound debt of consumers

The Liberal Democrats have been calling on the government to curb lending as personal debt broke through the trillion pound mark.

08:15 23 May 2004

The Liberal Democrats have been calling on the government to curb lending as personal debt broke through the trillion pound mark.

Commenting on the lending figures Liberal Democrat shadow chancellor, Vince Cable, said: "Today debt topped a trillion pounds, yet there is more evidence of a boom in lending."

Mr Cable believes the rise in lending by banks and building societies is "recklessly fuelling the housing boom."

He said: "If interest rates rise and house prices fall many people could find themselves in serious difficulty."

Mr Cable therefore urged the Government to make moves now in order to help the public: "It is time for the Government to take action to protect ordinary homeowners against irresponsible lending."

The figures published on Friday by the Building Societies Association, British Bankers' Association and the Council of Mortgage Lenders showed that lending had reached record levels.

Mortgage lending in April alone increasing by 6.4 billion - the highest monthly rise to date.

The Building Societies Association figures showed net advances in the same month were 31 per cent up on April 2003.

Likewise, the Council of Mortgage Lenders figures showed mortgage lending was up 25 per cent and lending for house purchases up 58 per cent on April last year.