Rising unemployment `to cause rise in debt problems`

The rising level of unemployment in the UK is to lead to an increase in debt problems.

This is according to David Kuo, director of Fool.co.uk, who made his comments following the publication of a report by the Organisation for Economic Co-operation and Development which suggested that the unemployment rate could reach close to ten per cent by 2010.

The expert stated that those who lose their jobs will be at higher risk of defaulting on their debts.

He added: "I think Britain will be a divided nation. [It] will be a nation of savers and people who cannot pay their debts."

Mr Kuo went on to say that there are also groups of people who will not have access to any credit at all, meaning they will not be able to get credit cards or mortgages.

The reason why banks are currently reluctant to lend to some consumers is because they are fearful that they will not get the money back, he said.