Public built up too much debt, admits minister

Millions of British households built up too much debt under Labour, Lord Mandelson admitted.

Opposition MPs seized on the Business Secretary's comments as an admission of failure of the Government's economic policy under Gordon Brown.

His remarks came as signs of recovery grew with interest rates kept on hold by the Bank of England, which also decided not to pump more money into the economy through "quantitative easing" - seen by economists as another hopeful sign.

Mortgage lender Halifax said house prices rose for the second month in a row in August.

In a speech at the Central Party School in Beijing, Lord Mandelson said that the economic crisis had "revealed weaknesses in all of our economies".

"Britain's households carried too much debt and its large financial services sector made it vulnerable," he said.

"Many parts of the Western mortgage and investment banking industries suffered what can only be described as a crisis of professional and regulatory competence."

Lib-Dem Treasury spokesman Vince Cable said: "Now we finally have a Cabinet minister admitting that economic growth was seriously unbalanced under Gordon Brown."