A report in the U.K.’s Telegraph today describes what it’s like in the world’s other fading Anglo-Saxon empire, this empire in a much more advanced stage of decay than ours where the effects of a late stage financial economy have now all but vanished, leaving the citizenry to rack up more credit card debt just to put food on the table and heat the house.

Britons’ finances have suffered their steepest decline since the recession in June as people loaded up with more debt to finance the rising cost of living, according to the monthly household finance index from Markit.

Six times as many households (36pc) saw their financial position worsen from May, compared to those who saw an improvement (6pc), the leading monthly survey from the financial information firm showed. Data was collected between June 8 and 14.

People’s finances deteriorated as they delved into their savings and took on more debt to cope with increasing prices and falling incomes. That helped the index’s headline measure drop to 35.1, the lowest level since March 2009, when the UK was still mired in recession.
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The findings support predictions from the Office for Budget Responsibility (OBR), the independent fiscal watchdog, that households will borrow more to maintain their living standards – £500bn more within four years, or £20,000 per family.

Inflation, currently more than double the target, at 4.5pc, means prices are rising much faster than people’s wages, resulting in “real” cuts which leave families squeezed. By 2015, debt as a proportion of income will have jumped by 15 percentage points to 175pc, passing even 2007’s record 173pc level, the OBR predicts.

This is what some are now calling the “New Road to Serfdom” (that is, so long as the banks don’t cut these people off), a condition that is already showing up here in the U.S. and one that will likely get much, much worse in the years ahead.