Household debt Consumer debt in the UK is down 10%. The bad news? Utility bill arrears are up Britons have been borrowing less since Covid, but people on lower incomes are falling behind on the rent 3 March 2024 by Torsten Bell It’s important to worry about the right things. Interest rates are up, sparking worries about our debts – in my case, the mortgage. Consumer debt (credit cards, overdrafts and personal loans) is surging, we’re told. But the truth is, consumer debt levels are down. New Resolution Foundation research shows them at their lowest since at least … Continued READ MORE
Household debt· Housing A loan scheme for renters could stop tenants from being made homeless 18 February 2021 by Lindsay Judge The protracted length of the coronavirus crisis has led to rent arrears reaching twice the level observed going into the crisis. In January 2021, we estimate that over 750,000 families were behind with their housing payments, 300,000 of which contained dependent children. Before the pandemic hit, many families spent a high share of their income … Continued READ MORE
Household debt The Bank has increased borrowing costs, but is personal debt bubbling over? 5 November 2017 by Matthew Whittaker Following a period of double digit growth in consumer credit over the last year or so, there have been some concerns about the reappearance of a debt bubble in the UK economy. In truth though, household borrowing currently resembles less of a bubble and more of two day-old helium balloon: partially deflated and looking worse … Continued READ MORE
Household debt Time to put away the credit card 13 July 2017 by Toby Phillips The squeeze is on. National accounts data last month confirmed that household incomes have been falling for the last three quarters. Yesterday’s labour market statistics showed that wages continue to lose ground to inflation. And today new survey data from the Bank the England shows that credit availability is tightening. Today’s survey is the latest … Continued READ MORE
Household debt· Wealth & assets Time for a re-rewind on debt? 28 March 2017 by Matthew Whittaker Just like Craig David, debt made something of a comeback in 2016. Having peaked at 160 per cent on the eve of the 2008 financial crisis, household debt as a share of income fell to 140 per cent by the end of 2015. Successive increases in the first three quarters of 2016 took the ratio … Continued READ MORE
Household debt· Prices & consumption Consumer borrowing is up. But will it last, and should we be concerned? 12 January 2017 by Matthew Whittaker Consumer borrowing is increasing at its fastest rate in 11 years. As the chart below shows, outstanding debts (excluding mortgages and student loans) rose by 10.8 per cent in November 2016 – faster than any time since October 2005. This surge has inevitably prompted concerns that the UK is heading back down the path of … Continued READ MORE
Household debt· Wealth & assets Why defusing the debt bomb means dealing with distributions 26 December 2015 by Matthew Whittaker Following the near-collapse of the global financial system back in 2008, it appeared only a matter of time before the UK’s household debt time bomb went boom. In aggregate, households owed just shy of 1.6 times their total income, up from a ratio of just over 1 at the start of the century. That there … Continued READ MORE
Household debt· Macroeconomic policy To avoid squeezed households struggling, we must beware of premature interest rate rises 6 August 2014 by Matthew Whittaker Thursday’s interest rate announcement from the Monetary Policy Committee is unlikely to generate many headlines. “Bank does nothing for 65th straight month” is hardly a circulation-booster, even during silly season. But we can expect plenty of speculation alongside the announcement that the consensus among MPC members on holding rates will have been broken for the first time since … Continued READ MORE
Household debt· Housing The repossessions timebomb: how to help homeowners at risk of default 6 August 2014 by Katie Blacklock Against the backdrop of the most prolonged recession in living memory, the relatively small increase in homes being repossessed has been a welcome surprise. Numbers did spike, but they never reached the levels of the early 1990s and have been coming down steadily over the last four years. This owes something to government support programmes, … Continued READ MORE
Household debt· Macroeconomic policy Once interest rates start rising, how can indebted households be helped through the painful transition? 24 July 2014 by Gavin Kelly Whether it is this autumn, the New Year or shortly after next May’s election, everyone knows that interest rates are going to start rising sometime relatively soon. Yet despite the endless “guess the month” speculation about the precise timing of the first rise, little thought has actually been given to the bigger and longer-term question … Continued READ MORE
Household debt The Bank’s conundrum countdown – Tightening policy in the shadow of a debt overhang 17 June 2014 by Matthew Whittaker If Mary Poppins taught us anything, it’s that a British bank is run with precision. But against a backdrop of rapidly changing and sometimes conflicting economic data, the balancing act currently facing the Bank of England requires a level of calibration rarely before seen. Clearly monetary policy must be tightened over the coming months and … Continued READ MORE
Household debt· Wealth & assets We need to solve the mortgage problem before interest rates rise 23 May 2014 by Matthew Whittaker The question of when interest rates should begin to rise has been much-discussed in recent weeks, and after five years of sitting at the rock-bottom level of 0.5 per cent, a gradual increase is expected from next year onwards. This has implications for the UK’s 8.4 million mortgagors, one in ten of whom risk being … Continued READ MORE
Household debt· Wealth & assets· Housing The end of a ‘golden era’ for mortgages 23 May 2014 by Matthew Whittaker It’s been a busy week in the world of monetary policy. On Sunday, Mark Carney said that rising house prices pose the biggest threat to economic recovery. On Tuesday, the official statistics told us what we already knew – that house prices in London are soaring, by 17 per cent year-on-year. Some homeowners are finding … Continued READ MORE
Household debt· Wealth & assets· Housing The ‘mortgage prisoners’ with no escape route 22 May 2014 by Matthew Whittaker Mark Carney, the governor of the Bank of England, has made headlines after expressing concerns about the dangers of another “big debt overhang” building up as house prices continue to rise and approvals for large mortgages increase. He is right to be concerned, and his intervention is a further reminder of how we need to … Continued READ MORE
