Banks have reported the biggest surge in the number of customers missing loan repayments since the financial crisis. In the most worrying sign yet that household debt is out of control, high street lenders informed the Bank of England that default rates have soared on credit cards, personal loans, overdrafts and car finance. Default rates on credit cards are expected to get even worse over the summer. According to the Bank of England's latest Credit Conditions Survey, 24.4 per cent more lenders reported default rates on credit cards rising rather than falling over the last three months. Worrying: High street lenders informed the Bank of England (pictured) that default rates have soared on credit cards, personal loans and car finance. This is the highest figure since the start of 2009, shortly after the taxpayer bailouts of RBS and Lloyds. The picture is even more worrying on other unsecured borrowing, including personal loans and car finance, with 30.3 per cent more lenders reporting an increase in customers missing repayments. These are the worst figures since the height of the credit crisis at the end of 2008. Almost £200billion in consumer credit is owed in total – an average of around £7,700 per household – and this figure does not even include mortgages. Lenders have told the Bank of England they intend to crack down on consumer credit over the next three months to rein in risky lending. To tackle the problem, they revealed plans to reduce interest-free introductory periods on so-called 'teaser rate' credit cards. The Bank has already raised concerns these deals are helping to fuel Britain's borrowing binge, by allowing customers to pay no interest on existing debt for up to 43 months. Some cards also allow people to make interest-free purchases for two years or more, encouraging them to rack up more debt. This is the first time lenders have signalled a crackdown on these deals since the Bank of England started asking about them at the start of 2015. Unsustainable: Wes Streeting (left), a Labour member of the Treasury Select Committee, said: 'For some time there have been warnings that the rise in unsecured borrowing is becoming unsustainable and Britain is on the brink of a household debt crisis' Banks fear many customers will be unable to pay off these debts – particularly when interest rates finally rise from record lows. Rising inflation has also led to a fall in real wages, which is putting household budgets under pressure. Wes Streeting, a Labour member of the Treasury Select Committee, said: 'For some time there have been warnings that the rise in unsecured borrowing is becoming unsustainable and Britain is on the brink of a household debt crisis. 'These figures confirm that this debt crisis has arrived, with a rise in people defaulting on their debts even before a rise in interest rates. 'We have a perfect storm here of rising borrowing, rising inflation and a rise in interest rates coming down the track.' Lenders insisted they have become stricter about who they offer credit since the start of the year. But the Bank's latest figures show short-term household debt growing at its fastest pace in 12 years. It has ordered lenders to come clean about the high-risk loans on their books and warned they will face disciplinary action if they do not set out plans to address concerns by the end of September. In a damning report published earlier this month, it revealed reckless banks are failing to carry out basic checks on new customers' debts before offering them more loans and credit cards. The Bank said many of the biggest lenders have no idea how much debt existing borrowers have racked up, and whether they could cope if mortgage repayments rise. Former pensions minister Baroness Altmann said: 'This rise in default rates on loans and credit cards is another siren warning of trouble ahead for over-indebted consumers. Action to curb irresponsible lending should have been taken long ago.'
the Bank of England's (BoE) has predicted that UK consumers will continue to default on their credit card debts in the coming months. Roughly 25% of lenders in the country have reported rising rates of default in the past three months, according to the BoE's most recent credit conditions survey. The figure is the highest since early 2009 and, as a result, lenders have told the central bank that they plan to rein in risky lending in the coming quarter.