UK Household Debt Surges as Gen Z Borrowing Reaches Seven-Month High

UK household debt rose at its fastest pace in seven months in February, driven by a sharp increase in borrowing among 18-24 year-olds amid high youth unemployment. Debt climbed across all age groups except 25-34 year-olds, according to the S&P Global Consumer Sentiment index. The 16-24 unemployment rate reached 15.3%, surpassing the EU average. Tight labor market conditions, minimum wage hikes, NI increases, and AI-driven job cuts are constraining entry-level employment. Credit availability fell sharply in August 2024, exacerbating household concerns. The sentiment index hit a 10-month low for big-ticket purchases as savings declined, particularly in the East Midlands. Economists expect the unemployment rate to rise to 5.2% in Q4 2025.