Britons owe more money than the entire nation produces in a year, according to the Bank of England. In a historic first, British debt levels in 2006 exceeded the nation’s gross domestic product (gdp), which measures all the goods and services produced per year by individuals, industry and the government.

The Bank of England data shows that consumer debt grew to a massive £1.345 trillion this year.

British consumer debt levels, when compared to economic output, also far exceed levels in Germany, Japan and even the United States. The ratio of household debt to personal income in the UK stood at 1.62, compared to 1.09, 1.36 and 1.42 for Germans, Japanese and Americans respectively, the National Institute of Economic and Social Research reported.

New research also shows that record numbers of households are struggling to make payments on their debt. The amount of money Britons spend on debt payments has climbed to its highest level since the early 1990s. Adding to the payment pain, especially for credit cards and variable-rate debt, the Bank of England has raised its interest rates five times in the last year.

As more of their money is sucked away to pay interest, British consumers are finding their pocketbooks pinched.

Approximately 7.7 percent of households are experiencing trouble paying their mortgages, the Bank of England recently warned. A MoneyExpert.com survey of more than 2,000 adults found that although just under one quarter were debt-free, 31 percent were either concerned or very concerned about their ability to manage the money they owe.

The effects of the “buy now, pay later” culture are just beginning to touch Britons. Such widespread over-spending across the nation will eventually result in pervasive consumer consumption cutbacks and a weakened economy overall. Mounting debt levels are only one sign of an increasingly precarious national economy. Britons should prepare now for much tougher economic times ahead.