The average Briton now has debts of £4,426, after unsecured borrowing rose almost a third during 2003, research showed today.

Market analyst Datamonitor said the figure was almost double the amount people owed on credit cards, loans, overdrafts and hire purchase agreements in 1998 and more than £1,000 higher than 2002's total of £3,383.

The group said low interest rates, high employment and soaring house prices had boosted consumer confidence and people now collectively owed £175.6 billion, with new lending during the year breaking through the £200 billion mark for the first time.

But it added that while the outlook for the consumer credit market remained largely positive, the golden age of borrowing was coming to an end.

It estimates that the average unsecured debt will grow to just £5,741 by 2008, an increase of only £263 a year during the next five years.

Author of the report, Oksana Selezneva, said: "Clearly the exact extent of personal over-indebtedness is contested and it is near impossible to predict how hard future rates rises will hit British consumers.

"It is, however, certain that the future growth of the consumer credit market will struggle to match the levels exhibited in recent years.

"While the overall outlook for the market is largely positive, Datamonitor's forecasts suggest the golden age of consumer credit in the UK has, perhaps, come to an end."

Credit cards and loans were the most popular products during 2003, together accounting for 80 per cent of outstanding debt, as increased competition between providers led to a rush of tempting introductory offers.

However, while people borrowed more than £100 billion on their plastic during the year, the amount advanced through loans actually fell for the first time since 1999 as a result of strong competition from the booming remortgage market.

Friday January 09, 2004