MPs `debate merits` of caps on high-cost debt

The BBC has reported that MPs have been `debating the merits` of caps on the interest rates charged on some forms of debt.

Stella Creasy, MP for the Labour party, has called on ministers to help stop the "spiralling costs" faced by individuals who need to take on debt for a short period of time.

In some cases, Ms. Creasy said, interest charged on some forms of debt was the `equivalent of 10,000%`. She added that a growing number of high street shops offered short-term loans, hire-purchase agreements and credit deals.

One of the main points raised by MPs and campaigners was that the `big risk` with forms of credit like payday loans is that borrowers won`t have enough money available to repay the debt they`ve taken on - leading to a `spiral of debt` as interest is added to the money they owe.

A spokesperson for the industry said that bringing in a cap on debt interest would lead to confusion and would be `to the detriment of the consumer`.