The long heralded UK debt crisis is here and data released in the U.K. this week clearly shows this.

This is seen in UK retail sales and consumer spending which plunged in October, employment falling, pay stagnant and inflation ticking higher as sterling remains under pressure.

Yesterday, official UK figures showed prices were up by 4.2% last month on 12 months earlier, the highest level in four years. Britons ‘face expensive Christmas dinner’ as food price inflation soars reported The Guardian yesterday.

Meanwhile stock markets make new highs every week but the underlying economic data is not reflecting the “irrational exuberance” being seen in global stock markets.

Increased litigation as consumer debt climbs

Personal loans are becoming increasingly dangerous and more bubblelicious than even the stock market.

We have outlined a few times how UK consumer debt levels are at dangerous highs risking a new UK debt crisis. Recently Standard & Poor’s raised their own concerns regarding the rapid rise in UK consumer debts.

The rapid rise in UK consumer debt to £200bn from car finance, personal loans and credit cards is unsustainable at current growth rates and should raise “red flags” for the major lenders, ratings agency Standard & Poor’s has warned. – The Guardian

The high levels of debt are down to easy monetary policy, according to the standards agency:

Loose monetary policy, cheap central bank term funding schemes and benign economic conditions have supported consumer credit supply and demand.