The Financial Services Authority (FSA) has warned that high levels of personal debt could lead to a noticeable slowdown of the economy. The warning comes as retail spending has slowed down and the housing market is looking flat.
They believe that banks have generally been willing to lend cheaply, but as the economic environment is becoming more uncertain, growth is slowing down, but banks have yet to make a significant increase in their credit standards.
Our view
Seems a logical warning, borrowing at high interest rates to 'live for the now' is not sensible for any of us.