The global credit crunch will see a sharp rise in the number of Britons put on a debt blacklist and denied mortgages, loans and credit cards, experts claim.

The seven million turned down by mainstream lenders in 2006 is predicted to soar to at least 8.6million by 2011 - around one in six of the adult population.

It could be even higher as a result of the shock to the finances of the world’s banks caused by the U.S. mortgage meltdown.

Thousands of Britons are living a hand-to-mouth existence following five increases in the Bank of England base rate in the past year.

Home repossessions are up nearly a third on last year, coupled with a big rise in county court judgments against debt defaulters.

At the same time, banks, building societies and other lenders are radically reviewing their rules to screen out risky borrowers.

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