£40bn of household debt: Are we heading for another credit crunch?

[Mister M]

British households were £70bn in the black five years ago. Now five years later, British families are £40bn in the red. Vince Cable said:

"...growth being sustained by personal borrowing. Much of it is against an inflating housing stock.

Taken together with other indicators like the very weak external deficit position, it suggests we’re getting back to the old and unhappily discredited forms of economic growth".

http://www.independent.co.uk/news/uk/home-news/fears-of-new-economic-crash-as-british-families-run-40bn-deficit-a6782221.html

Are we right to be concerned?

[mossdog]

Debt seems to be meaningless these days now we can just keep printing more and more monopoly money.The whole financial system has lost all reality!

Are we right to be concerned?........not half!

 

This from an Independant write in.

 

As long as we continue to base our economy on buying more tat and the artificial property boom the future is very bleak. Are people saving? I doubt that very much. The interest rates coupled with inflation make saving a loss making exercise. Interest rate rise? Not likely as it would lead to a property market collapse and a huge number of defaults. Exit from the Euro? If we had a 'real economy' not services, tat and property based it would be a great idea. Therefore its best we stay in so when (soon) we do hit rock bottom we can negotiate loans from the Germans just like the Greeks!

Edited December 22, 2015 by mossdog

[hagrid]

UK's National Debt is below, that's a lot of 0's.

 

£1.56 trillion

[Cyclone]

British households were £70bn in the black five years ago. Now five years later, British families are £40bn in the red. Vince Cable said:

"...growth being sustained by personal borrowing. Much of it is against an inflating housing stock.

Taken together with other indicators like the very weak external deficit position, it suggests we’re getting back to the old and unhappily discredited forms of economic growth".

http://www.independent.co.uk/news/uk/home-news/fears-of-new-economic-crash-as-british-families-run-40bn-deficit-a6782221.html

Are we right to be concerned?

 

Hardly surprising when there is no incentive to save and credit is the cheapest it's ever been.

The base rate should have gone back up long ago IMO.

[sgtkate]

I agree that savings rates are poor but people are simply accruing more debt rather than using the low interest rates to overpay things like mortgages. It cannot last forever.

[L00b]

UK's National Debt is below, that's a lot of 0's.

 

£1.56 trillion

That figure is frequently bandied about, but is just meaningless scaremongering: it includes all future budgetary obligations and commitments that do not yet require budgeting for.

 

E.g. state pension of all active workers, whether a day into their first job (and 65-odd years away from drawing it) or 20 years into their career(s) (and 45-odd years away from drawing it), etc.

The base rate should have gone back up long ago IMO.

Seconded.

 

Might be happening here soon though, now that the Fed has finally raised the US one.

 

Popcorn is at the ready for when that happens

[Dr Afzal]

That figure is frequently bandied about, but is just meaningless scaremongering: it includes all future budgetary obligations and commitments that do not yet require budgeting for.

 

E.g. state pension of all active workers, whether a day into their first job (and 65-odd years away from drawing it) or 20 years into their career(s) (and 45-odd years away from drawing it), etc.

Seconded.

 

Might be happening here soon though, now that the Fed has finally raised the US one.

Popcorn is at the ready for when that happens

 

So how old would they be if they were a day in to their first job and 65 years away from drawing their pension:huh:

[tinfoilhat]

British households were £70bn in the black five years ago. Now five years later, British families are £40bn in the red. Vince Cable said:

"...growth being sustained by personal borrowing. Much of it is against an inflating housing stock.

Taken together with other indicators like the very weak external deficit position, it suggests we’re getting back to the old and unhappily discredited forms of economic growth".

http://www.independent.co.uk/news/uk/home-news/fears-of-new-economic-crash-as-british-families-run-40bn-deficit-a6782221.html

Are we right to be concerned?

 

Also on the front pages was the news we're sending troops into Afghanistan. Have I time travelled to 2008?

[spilldig]

Hardly surprising when there is no incentive to save and credit is the cheapest it's ever been.

The base rate should have gone back up long ago IMO.

 

Absolutely agree, and the longer it has been left low the worse any increase will seem. I honestly thought that Carney would be better than King, and I think he is but letting the interest rate slide is awful. It was, I think in the FT, last week that Osbourne is letting the bankers dictate policy again. Do they never learn.

[L00b]

So how old would they be if they were a day in to their first job and 65 years away from drawing their pension:huh:

16 or 18, of course.

 

You don't seriously think the retirement age will still be 65, in 65 years' time, do you?