BROKE BRITS; People going bust hits a 45-year high.

Byline: By STEVE HAWKES Deputy Business Editor

MORE people are going broke than at any time since records began in 1960.

Bankruptcies have soared to an all-time high of 40,840 in the past year - a 28 per cent rise on the previous year and nearly 112 a day.

Warning the crisis could worsen, debt expert Steve Treharne of KPMG accountants said: "We have a major consumer debt problem.

"If current trends continue, we could see annual bankruptcy rates at double the present level before there is any improvement. People have too many credit cards and there's too much debt in the system. It's payback time."

Individual bankruptcies surged 36 per cent to 12,338 in the last three months, official figures showed yesterday. In addition 3,229 firms went bust, a 45 per cent jump.

Britons have amassed more than pounds 1TRILLION of debt after taking advantage of cheap interest rates . But five rate rises since November 2003 have left many consumers with repayments they cannot afford.

The Bank of England reacted this week by lowering its base rate to 4.5 per cent. However experts fear it could be too little too late.

Describing the latest figures as "worrying", Lib Dem treasury spokesman Vince Cable said: "The Government must tackle debt by clamping down on reckless lending and misleading advertising."