IN THE window of an electrical-goods shop in Stoke-on-Trent, in the English Midlands, is a television worth ten times the local weekly wage. Though most passers-by could not afford such goodies, the retailer offers a generous credit plan. “0% FREE CREDIT: £500 MIN SPEND” is painted in large letters on the window. In a shopping centre nearby, easy finance is available on everything from furniture to jewellery. Local wages have stagnated in recent years, yet consumer lending in Stoke galloped up by 10% in 2016.

Stoke’s taste for credit is typical of the country as a whole. In the year to June, overall consumer debt (such as borrowing on credit cards) grew by 10%. The stock of outstanding consumer debt recently passed the £200bn ($260bn) mark for the first time since 2008. Finance to buy cars has been on a tear. In the past four years it has more than doubled, and now makes up over a quarter of the total.

Yet there is a worrying side to the credit splurge, and here Stoke is also at the forefront. In the past decade the city has seen a bigger rise in individual insolvencies than anywhere else. With Torbay, in the south-west, it vies to be Britain’s capital for going bust (see map). And what is seen in Stoke is increasingly seen elsewhere. In Britain last year the insolvency rate rose for the first time since 2009; in the first half of 2017 it was a tenth higher again. Theresa May promised in her first days as prime minister last summer to help those who were “just about managing”. The story since then is one of a growing number of people not managing at all.

On the eve of the financial crash of 2008-09, households were up to their necks in debt. On average they owed 150% of their income, with three-quarters of liabilities in the form of mortgages. Domestic banks eventually wrote off some £15bn of lending to British households (and lost much higher amounts on lending abroad). As banks incurred losses, they curtailed lending to businesses. As people consumed less to pay down debt, demand drained from the economy. Following the bust, households paid down much of what they owed. After falling to 130% of income, borrowing has more recently risen to 135%, with consumer lending leading the charge. At 20 per 10,000 people, the rate of insolvencies remains low compared with during the financial crisis, when it reached over 30. Yet in the past year it has in unglamorous parts of the country, such as the Isle of Wight and Blackpool. As the electrical shop in Stoke suggests, some people are being tempted to borrow more than they can manage. And some lenders may be acting complacently. In 2012-17 the average advertised interest rate on a £10,000 personal loan fell from 8% to around 4%, even though the Bank of England barely reduced the base rate. On August 22nd shares in Provident, a door-to-door lender, fell by more than 60% after it issued a dire profit warning. The firm appears to have been poorly managed; its debt-collection rates have slumped. Though some of the credit is being used to buy monster televisions, other people are turning to debt to make ends meet. According to Simon Harris of Stoke’s Citizens Advice bureau, increasingly the people seeking help have small debts run up by borrowing to pay everyday bills such as rent or council tax. At this time of year loan sharks step up their door-to-door rounds, knowing that with the school term approaching, parents need cash to buy their children clothes and books.

People’s growing reliance on credit is not surprising, given the recent squeeze on household accounts. Real household income has tumbled since the Brexit vote last summer, because of the inflation caused by sterling’s depreciation. Even nominal household income has fallen, making it harder to service debt.

The people visiting Mr Harris may also have been affected by the big cuts to welfare which took place in 2010-16. In many areas it is harder to get help with council tax than it was. Locals complain about the so-called “bedroom tax”, a cut in housing benefit for social tenants with a spare room. A second, harsher, round of benefit cuts began nationwide in April 2016.

The question is whether Stoke’s experience augurs something more sinister. Before the financial crisis, poor areas were the canary in the coal mine for the nationwide problems to come. Insolvencies started to rise relatively quickly from the mid-2000s.

Shop ’til you drop

Happily, some evidence suggests that this time will be different. Mortgage lending, by far the largest component of household debt, does not look too risky. Newish regulations encourage banks not to lend irresponsibly to homebuyers. Ultra-low interest rates mean that servicing a mortgage has never been cheaper. Thanks also to low unemployment, the share of mortgages in arrears is low.

Households’ balance-sheets are also stronger than is often acknowledged. Official data suggest that, on aggregate, households could pay off their financial liabilities and still have financial assets (such as savings and shareholdings) worth four times disposable income, one of the healthiest figures in decades.

Furthermore, the bulk of the extra consumer borrowing in recent years has gone to well-off places. In St Albans, a satellite of the capital, shoppers peruse fancy establishments in the shadow of the city’s cathedral. Outstanding unsecured debt in this neck of the woods has grown by fully 50% in three years, the fastest rate in the country. Yet St Albans is wealthy and has low unemployment. It has one of the country’s lowest rates of insolvency.

Nonetheless, regulators are worried about pockets of the financial system. The Prudential Regulation Authority, part of the Bank of England, says that “the resilience of consumer-credit portfolios is reducing”. Write-offs on credit cards have inched up. If defaults rose further, banks might curtail lending. With wages falling and the economy slowing, that is something Britain could do without.

For now, the most likely outcome is that areas of problem-debt emerge. That is in itself a cause for concern. Insolvencies hurt already-weak local economies, so the country’s regional divides will widen. Resentment will grow; already there is a strong correlation between the local rate of insolvency and the propensity of residents to have voted for Brexit. Those who feel left behind are about to become more so.