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UK debt £10 trillion by 2015, says report

Tuesday 09 November 2010 by

People in finance jobs may be interested in the latest economic outlook report from PricewaterhouseCoopers, which has suggested borrowing could reach £10 trillion in the next five years.

The amount of debt in the UK has grown rapidly over the past two decades, up from double the national income in the late 1980s to over five times the income in 2009, the report says.

It puts this increase puts down to money owed by "household mortgages, private companies related to commercial property and financial institutions lending amongst themselves," the report states.

Gross domestic product is expected to rise by around two per cent next year, but the organisation warns businesses to keep contingency plans in place for the possibility of a double-dip recession.

It also advises companies to assess the potential impact of any future interest rate rises and suggests they consider whether relying on equity rather than debt may be more appropriate.

At its latest monthly meeting on November 4th, the Bank of England's Monetary Policy Committee voted to maintain interest rates at a record low of 0.5 per cent, where they have been since March 2009.