Bank warns of a UK debt bubble

THE Bank of England has told credit card firms to rein in lending to avoid a dangerous bubble.

Families owe £70bn on their cards, and in a letter to chairmen yesterday, the Bank said risks from bad lending ‘remain elevated’.

It added that some boards are not getting enough information to spot warning signs of when things are going wrong.

Strong economic growth has lulled lenders into a false sense of security and they could face greater losses than expected during a downturn, the Bank said.

And, in a sign that interest rates could rise again in the coming months, it added that lenders must think about factoring in whether their customers could face rising mortgage costs.