Warning as family debt binge hits 11-year high

BRITISH families are borrowing money at the fastest pace for 11 years amid warnings the country faces a dangerous debt binge.

New Bank of England figures show a 10.3pc rise in non-mortgage borrowing such as debt on credit cards and car finance.

Britons splurged an extra £1.8bn last month and now owe £186bn. The amount owed on mortgages was up £3.3bn, a 3.3pc growth rate.

In total, £1.3trillion has been lent to the public against the value of houses.

There were 64,766 mortgage approvals in June, down from 66,722 in May and continuing a year-long trend. The figures suggest there was no hit to borrowing ahead of the Brexit vote, implying confidence remained high.

But there are fears the borrowed money underpinning the economic recovery makes Britain less stable.

The vote to leave the European Union makes a Bank of England interest rate hike unlikely for years – in fact, markets now expect it to be cut in half to 0.25pc next week. But the rate will inevitably go up one day.

Justin Modray, of Candid Money, said: ‘There’s an increasing worry that households may be over-extending themselves by borrowing too much money, and in this very uncertain climate that’s extremely worrying.’