An unhealthy interest?


Standing at nearly £1.9 trillion, UK household debt remains a big issue. It is one that has very real and very obvious relevance for those families having to meet repayment commitments. But it is one that has macroeconomic implications too: the debt hangover that has endured over the past decade has undoubtedly hampered the UK’s recovery from the financial crisis. It is unsurprising therefore that the recent surge in consumer credit growth has provoked some concerns that households are once again storing up problems for the future especially with interest rate rises expected over the coming years. The good news is that much of the credit surge appears to have been associated with borrowing by higher income households, who we would expect to be relatively well placed to deal with future shifts in circumstance. And many of the credit market fundamentals look much improved relative to the pre-crisis period, with tighter lending criteria and closer monitoring of potentially unwelcome developments. But while the flow of credit may be much improved, the stock remains substantial. Increases in the base rate will inevitably increase costs for many indebted households and have the potential to further increase the debt distress faced by some.

Read Full Report

Explore our reports

  • Reset
Advanced search

Related Events

Mon

6

June

A remote chance?

This event, hosted by UK think tank Onward, considers the future of work and the economic impact hybrid and remote…

More Info

Wed

25

May

Platform Socialism: James Muldoon in conversation with Demos

At this event, hosted by UK think tank Demos, James Muldoon will discuss his new book, 'Platform Socialism'.   As…

More Info

Tue

31

May

How liberty made the modern world

At this event, hosted by UK think tank the Adam Smith Institute, Deirdre Nansen McCloskey will discuss how liberty made…

More Info