Mortgage arrears have increased by 35% in the first 2 months of 2008 said the Citizens Advice Bureau.
This was coupled with an increase in arrears on essentials such as utilities, telephone bills and council tax bills.
The higher cost of living is making it a real struggle for many families and the number is growing rapidly.
Debts on credit cards and store cards are the largest proportion of debt as well as problems with overdrafts.
These sharp rises are extremely worrying and paint a bleak picture of the economy. While the credit crunch shows no signs of abating, the UK government shows few signs of tackling the situation. They seem to be more worried about the cost of bread (ie inflation) and sticking to their 2% targets than addressing the finance sector which in turn would be able to ease the pressure on UK families. The Federal Reserve in the US has been aggressively cutting interest rates to try and shore up the economy while the UK government is taking a wait and see approach.
The problem is the deterioration in the finance sector is seemingly being underestimated by the UK government who should take action now. The longer they leave rates unchanged the more damage they are doing to the economy and should worry about their inflation target when their are signs of stability in financial markets.
Debt is now the number one issue in the UK and a cut in interest rates will ease the pressure on UK families.