Personal debt in the UK is higher than the income generated by the country as whole for the second year in succession, according to research released today.
The total amount of money owed by consumers through mortgages, loans and credit cards now stands at a massive £1.44 trillion after a credit-crunch defying 7.3% increase on last year.
Over the same period last year, gross domestic product (GDP) rose by only 5.1% in nominal terms to £1.41 trillion.
As a result it would take until January 8, 2009, to pay off the UK's outstanding consumer debt from GDP during a calendar year.
The date at which GDP can cover consumer debt has been getting later and later during the past decade, after falling on August 23 in 2007 when personal debt amounted to just £503 billion and GDP was £786 billion.
The group said the figures showed that despite tighter lending criteria and a reduced availability of debt as a result of the credit crunch, the UK was continuing to suffer from the legacy of cheap borrowing over the past few years.
Stephen Gifford, chief economist of accountancy firm Grant Thornton's, who conducted the research, said: "Despite the global downturn flattening the growth of personal debt and UK GDP over the past few quarters, debt levels continue to grow at a faster rate than the income the UK generates.
"Although there is no cause for panic as personal debt is well covered by the UK housing stock, the figures clearly illustrate the continuing problem of growing personal debt levels in the UK."
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