by Calculated Risk on 5/26/2005 10:33:00 PM

The Telegraph reports that Barclays warned "of soaring bad debt on cards":

Barclays yesterday became the first major bank since the recession of the early 1990s to issue a warning that bad debts are growing sharply.

As the biggest provider of credit cards in the country, with nine million Barclaycard customers, it told the City that provisions for bad debts "rose significantly" in the first quarter of the year.

Earlier I commented that the UK might be a leading indicator for the US. See also comments by Kash and General Glut.

The good news is that financial stress indicators are still low.

The number of people in serious financial difficulties is still low compared with the last recession. Personal insolvencies have jumped by a third in a year but that can be explained in part by a relaxation in the rules, allowing bankrupts to be discharged after one year instead of five.

Analysts say that a better indicator of financial duress is the repossession of houses by mortgage lenders. Only 6,320 houses were repossessed last year, compared with 78,000 in 1991.

However, the number of people in arrears with their mortgages is rising for the first time since 1998. The latest figures show that nearly 54,000 households are three to six months in arrears, a rise of 5,000 on a year ago.

But it appears the writing is on the wall.