THE increasingly miserable state of affairs for the UK’s economy and its financially squeezed population has been underlined this week by a warning from the Bank of England and a growth forecast downgrade from the International Monetary Fund.

The misery is in large part the result of the UK population’s vote to leave the European Union, whether the likes of Brexit enthusiast and International Trade Secretary Liam Fox agree with this analysis or not. That said, we should not overlook the destructive effect of the Conservatives’ grinding austerity programme since 2010 and their consistently poor economic stewardship.

It was no surprise, given the increasing strain on household finances arising from the Brexit vote-fuelled surge in inflation and consequent renewed fall in real wages, to hear the Bank of England warn this week on household debt. However, the tone of the warning, while entirely appropriate, might have ruffled some feathers in the financial sector. Hopefully, it will also have been heeded by the UK Government, which too often seems utterly oblivious to the financial problems of ordinary people.

Alex Brazier, director for financial stability at the Bank of England, said: “Household debt – like most things that are good in moderation – can be dangerous in excess. Dangerous to borrowers, lenders and, most importantly from our perspective, everyone else in the economy.”

Mr Brazier warned of the danger of a “spiral of complacency” among lenders on household debt.

He noted that, since the financial crisis, helped by low interest rates, “Britain’s households have reduced their debt”, but cautioned: “We do still have a high level of household debt by historical and international standards.”

And, highlighting areas of potential concern, Mr Brazier said: “In the past year, outstanding car loans, credit card balances and personal loans have increased by 10 per cent. Household incomes have risen by only 1.5 per cent.”

These figures speak for themselves.

Mr Brazier highlighted the importance of keeping banks’ “defence line… robust in the face of rapid consumer credit growth”. He pointed out the Bank of England had in recent months raised the capital buffers that banks are required to hold on all of their lending.

Noting the Bank of England was accelerating this year’s test of banks’ consumer credit loans, he added: “By September we will have assessed whether the rapid growth has created any small gap in the line. If it has, we’ll plug it.”

We are hearing more and more warnings about the debt being taken on by UK households, as they try to keep up with the rising cost of living against a backdrop of falling real wages. The consumer price inflation surge has resulted largely from the pound’s tumble in the wake of last year’s Brexit vote – a fall that underlines global financial markets’ firm view that the UK’s economic prospects have diminished very significantly with the Leave decision.

Unfortunately, there is no sign of relief for consumers in terms of any improvement in the UK economy’s dreadful performance.

This poor performance means UK base rates may remain at a record low of 0.25 per cent for a while longer. However, it is important households bear in mind as best as they can the fact that interest rates are currently at rock-bottom when they take on a mortgage or unsecured debt, and consider their financial position over a period of many years. That said, we must not forget that millions of households are facing a daily struggle to make ends meet, in terms of covering basic costs, with the Conservatives’ savage welfare cuts having exacerbated this problem.

On Monday, the IMF cut its forecast of UK growth this year from an already way-below-trend two per cent to just 1.7 per cent. It held its projection of UK expansion in 2018 at 1.5 per cent, so it is still projecting a further slowdown next year. The UK grew by only 1.8 per cent in 2016.

Mr Fox, and any of his colleagues who might harbour notions there is some kind of net benefit from Brexit, may or may not want to observe that this downgrade came in a World Economic Outlook entitled, ‘A Firming Recovery’.

This “firming”, of course, refers to significantly improved global growth prospects, rather than the UK’s most peculiar predicament in the aftermath of the Brexit vote.

Against this improving global backdrop, the IMF has raised its forecast of euro area growth this year from the 1.7 per cent it had projected back in April to 1.9 per cent.

Maurice Obstfeld, economic counsellor at the IMF, said of the global picture: “The recovery in global growth that we projected in April is on a firmer footing; there is now no question mark over the world economy’s gain in momentum.”

The IMF’s take on Brexit Britain was far less positive, as it cut the 2017 growth forecast to 1.7 per cent in light of very weak UK expansion of 0.2 per cent quarter-on-quarter in the first three months of this year. Official data on Wednesday, after the IMF’s growth forecast downgrade, showed the UK grew by only 0.3 per cent in the second quarter.

Mr Obstfeld said of the UK: “Our projection for the United Kingdom this year is...lowered, based on the economy’s tepid performance so far. The ultimate impact of Brexit on the United Kingdom remains unclear.”

Of the global picture, he said: “Overall...recent data point to the broadest synchronised upswing the world economy has experienced in the last decade. World trade growth has also picked up, with volumes projected to grow faster than global output in the next two years.”

It is a great pity hard-pressed UK households are not able to share in this global improvement.

Rather, Brexit Britain is a place in which debt will remain a grim worry for individuals, lenders and the Bank of England, as households try to make ends meet against a backdrop of falling real wages and extremely weak economic growth. Not at all fantastic, Mr Fox.