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Last Updated: Wednesday, 2 June, 2004, 14:24 GMT 15:24 UK
UK debt approaching 1 trillion
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People in the East Midlands expect to spend the most
Consumers are on track to owe 1 trillion this summer, official figures showing debts currently rising by 1m every four minutes, have suggested.

According to the Bank of England, money owed on cards, mortgages, loans and overdrafts rose by 11.1bn in April.

In total, consumers now owe 984.81bn, just short of the 1 trillion milestone, expected in the summer.

The buoyant data could make a second successive monthly rise in interest rates more likely, some experts said.

John Butler, an economist at HSBC, said the figures indicated consumers' appetite for debt was continuing apace.

"Although the data is only for April and hence does not capture the May rate hike, it shows little evidence as yet that households have significantly adjusted their behaviour despite the rise, and expectation of further rises, in interest rates."

However, beneath the headline figures there was an indication that some consumers may be feeling the squeeze.

The bank said total net lending - borrowing on cards and loans other than mortgages - rose by 1.3bn in April, down from 1.7bn in March.

In addition, the number of mortgages approved also slipped slightly to 124,000 from 127,000, suggesting recent rate increases could be having some effect.

'Borrow more'

Although interest rate rises are not welcome news for borrowers and mortgage holders, they can give a boost to those with savings accounts.

However, a separate survey of borrowing and saving habits by the Alliance & Leicester appears to show Britons' continuing appetite for debt.

It said people expected to borrow more than save during the second quarter of the year.

The public plan to save 88 each month during the three months until the end of June, compared with 123 for the previous quarter.

They will also increase the amount they borrow, going up to 46 into the red each month compared with 39.

However, people do expect to cut back on their spending by up to 33.

The amount people plan to invest has fallen by 5, from 23 to 18 a month, compared with the first quarter of the year, according to the research.

Londoners tend to save the most money setting aside 161 a month but they will also borrow more than the rest of the UK, taking 160 out a month.

Splashing out

People in the East Midlands expect to spend the most in the second quarter of the year, splashing out an average of 244 a month.

The East Anglian public plan to spend the least with just 140.

Welsh people are expected to borrow the least, claiming they do not plan to take out any money at all.

The Scottish public on the other hand, plan to invest more than the rest of the UK during the second quarter, setting aside 62 a month.

Meanwhile, men are expected to have around 54% more disposable income than women after meeting all their outgoings and saving and borrowing commitments.

But both sexes expect to save around 30% of their income, while men will invest 7% of their pay compared with women's 4%.

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