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Lib Dem Cable Warns on Reports that Household Savings Fall to their Lowest Rate in 50 Years as Brexit Starts to Bite

July 9, 2017 9:16 AM

MoneyFigures released at the end of June showed that household borrowing continues to grow as hard pressed families try to maintain their spending. Unsecured consumer credit increased by £1.7 billion during the month of May 2017.

The rough total of UK personal debt is now £1.6 trillion - a staggering £57,000 per household.

Each UK adult now owes an average of £30,000, of which £4,000 is consumer credit.

The largest share of consumer debt is money borrowed to pay for cars and motor expenses - followed by credit card debt.

Liberal Democrat Vince Cable MP has warned that these stark figures show that the UK economy is now unsustainable. This level of personal debt could have "severe consequences" when combined with the impact of Brexit.

Vince Cable, the Liberal Democrat Shadow Chancellor said:

"We are seeing the lowest level of household savings in half a century.

"Rising prices and falling wages since the Brexit vote mean families are increasingly unable to live within their means or save for the future.

"Our economy's reliance on consumer spending, propped up by debt, is not sustainable and combined with an extreme Brexit the consequences could be severe.

"It is our responsibility as MPs to pull the economy back from the precipice by ensuring Britain remains in the single market and customs union.

"Just one-fifth of Labour MPs backed staying in the single market yesterday. I hope that more will see sense as the economic consequences of an extreme Brexit become clear."

Local Hertfordshire County Councillor for Tring, Nick Hollinghurst commented,

"For big items, like buying your home on a mortgage, affordable borrowing is a sensible thing to do, but borrowing to buy consumer goods is not so clever. Credit card borrowing in particular is amazingly expensive and if, instead of saving up to buy a new fridge/freezer buy it on a credit card you might easily end up paying double.

However, an awful lot of borrowing is to buy new cars and of course this can mean getting a car that's easier to drive, cheaper to run and less polluting. And we do need to get the old noisy, smelly diesels off the road entirely. If the government reintroduces some form of scrappage scheme that nudges people away from diesel towards petrol hybrids or all-electric cars it could be a win-win-win situation.

Consumers could get a bit of help to reduce costs andwould need to borrow less, there would be environmental and running cost benefits and the economy could get a much needed boost."