Sales add to credit headache

Britian faces a ? 1billion credit hangover after a major Christmas spending spree.

And as the New Year sales continue, there is no sign of a let-up in the hunt for bargains.

Designer brands like Gucci and Chanel start their sales today along with Harrods where pop star Victoria Beckham will perform the opening ceremony.

Retailers are confident after the recordbreaking year-end bonanza.

Sarah Shaw of department store Liberty, said: "It has been an amazing sale for us and pre-Christmas takings were fantastic as well. We are quietly confident people will carry on spending right through January."

But a record £1billion was borrowed in November and consumers still have to pay off ? 22.5billion already on their credit cards as many put off repayments to fund festive spending.

The watchdog Financial Services Authority, concerned about reckless spending, last week urged bargain hunters to leave their credit cards at home. But there was little evidence that people took notice.

Experts believe the average person's overall debt - including their mortgage - is now higher than their annual salary.

City & Business