Britons ‘are living beyond their means’
British consumers are living beyond their means, according to one financial expert.
Higher personal borrowing could threaten future economic growth as well as the growing likelihood of further tax increases, says chief economic adviser of the Item Club Peter Spencer.
He told the Scotsman that while business growth will lead to increased economic growth in the short-term, this is likely to be hampered by the government and consumers taking on increased debt.
“Both as individuals and as a country we have borrowed a huge amount to support this growth. The bottom line is that we are all living beyond our means,” he said.
Mr Spencer said that a rise in taxes would be necessary in the medium-term in order to get borrowing and spending back on track.
Meanwhile, inflation hit a ten-year high last week of 3.1 per cent, suggesting that the Bank of England may raise interest rates again to bring it to its two per cent target.
Consumers seeking a way to tackle their debts but who want to avoid the stigma of bankruptcy may wish to take out an individual voluntary arrangement.
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