The number of bankrupts in Britain has soared, with 20,000 people filing for bankruptcy between April and June alone, say insolvency experts.

The figure, expected to be confirmed in new Government statistics this week, is 10 per cent up on the total of 18,000 for the first three months of the year.

Rising taxes and interest rates are blamed for the increase. Mark Sands, the head of personal insolvency at the auditor KPMG, said: "At a time when wages are rising relatively modestly, families have faced five interest rate rises in a year, and huge increases in utility bills and council tax. The level of financial distress is alarming, and we are seeing more and more people crying out for help."

the Sunday Telegraph can also reveal that more than 420,000 were prosecuted for defaulting on loan repayments in the first half of the year - an 8 per cent rise on the same period in 2006.

Next week, the top five banks are also expected to report a £6.6 billion increase in bad debt.

With interest rates predicted to break through the 6 per cent barrier next month, MPs and experts united to condemn the Government for failing to deal with soaring levels of debt.

Vince Cable, the Liberal Democrat deputy leader, said: "This Government has consistently overlooked what is for many a very serious and deteriorating problem."

The Citizens Advice Bureau dealt with more than 1.4 million new cases of debt last year, up 11 per cent on 2005. It said debt enquiries had risen "remorselessly" and lenders were not making the checks needed to ensure that people could afford to take on more credit.

Neville Kahn, an insolvency partner at Deloitte, said: "The vast array of lenders means it is far too easy for people to overstretch themselves.

"But in the second half of the year, I expect it will become more difficult for people to spend their way out of trouble."

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