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THE public is falling further into debt amid the cost-of-living crisis, Bank of England figures showed today as individuals borrowed an additional £800 million in May.
Credit card borrowing increased by 11.2 per cent on the year in May, the bank said, just a month after energy bills and food prices soared.
Other consumer credits, such as credit cards, personal loans, overdrafts, and car finance, rose by £400m.
Prime Minister Boris Johnson has suggested that the cost-of-living crisis is hitting Britain harder than other countries because workers are better able to demand pay rises.
He admitted that there were “unnecessary cost pressures” that meant families were spending more than they needed on housing, transport and energy, including wasteful government spending.
But Mr Johnson pledged a further £55 billion in defence spending on Thursday in response to Nato’s boosted military stand against Russia.
Jane Tully of Money Advice Trust, the charity that runs National Debtline and Business Debtline, said the BoE figures are “a worrying sign of the continued strain on UK household budgets.”
She said: “At National Debtline we regularly see people relying on credit to cover essential costs such as food, energy and council tax — more often than not it is a sign of financial difficulty.
“With consumer credit borrowing growing over the last 12 months, and rising costs showing no sign of abating, there are real concerns struggling households will find it difficult to repay when the time comes.”
Labour’s analysis of financial figures found that the average person in Britain in 2030 will still be poorer than the average American was in 2000, or the average Norwegian was in 1996.
Shadow chancellor Rachel Reeves said the analysis “tells you all you need to know about how the Conservatives have mismanaged our economy.”
She said: “The low-wage, low-growth, high-tax spiral we face needs more than sticking plasters.
“We must secure our economy and make it stronger by getting growth back on course, as the last Labour government did.”
Meanwhile, peace campaigners have slammed the PM’s announcement of a sharp rise in military spending, describing it as an insult to everyone struggling with the cost-of-living crisis.
The Peace Pledge Union (PPU) is planning protests against the policy in the coming weeks, warning that increasing military spending will not help people in Ukraine, prevent future wars or make people in Britain any safer.
Britain already has the fourth-highest military spending in the world.
In November 2020, Mr Johnson announced the biggest increase in military spending since the cold war.
PPU campaigns manager Symon Hill said: “After telling British workers to exercise pay restraint, Boris Johnson has barely paused for breath before announcing a whopping increase in the billions spent on weapons and war.
“A hypothetical future invasion is a long way down the list of threats faced by people in the UK.
“If you’re queueing at a foodbank, anxious about heating bills or unable to buy toys for your children, then your life will not be made safer or better by an increased budget for long-range rocket artillery.”
Mr Hill warned that the only thing the PM’s policy will defend is the profits of arms dealers, adding: “The militarist lobby and the arms industry have cynically used the horrific war in Ukraine to push for higher military spending.
“This is a massive insult to people suffering in Ukraine.
“The UK government and other Nato members have poured billions of pounds into military spending in recent years, but this failed to stop Putin’s vile invasion.”
Mr Hill warned that there can be no military solutions to the Ukraine crisis but only meaningful peace negotiations.
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