Debt levels near 'tipping point'
A combination of rising consumer bad debts and increased regulation mean a more worrying outlook for financial services institutions in 2004, Ernst & Young have warned.
Interest rates remained at near 50 year lows for much of 2003, yet debt collectors in the UK are currently chasing record levels of unpaid bills.
Although the majority of consumers are becoming more financially aware, a substantial minority are not. And with outstanding loans now standing at over 120% of disposable income, Ernst & Young says a real crisis is looming for the 10% of the population who hold 50% of the unsecured debt.
It is claimed a tipping point could be reached, with the potential combination of higher taxes and the higher interest rates in 2004 making futher bad debt write offs by lenders inevitable.