Why Surging UK Household Debt Will Cause The Next Crisis

– Easy credit offered by UK banks is endangering ‘everyone else in the economy’
– UK banks are ‘dicing with the spiral of complacency’ again
– Bank of England official believes household debt is good in moderation
– Household debt now equals 135% of household income
– Now costs half of average income to raise a child
– Real incomes not keeping up with real inflation
– 41% of those in debt are in full-time work
– 1.537 trillion owed by the end of May 2017
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Editor: Mark O’Byrne
Why UK household debt will cause the next crisis
‘Household debt is good in moderation,’ Alex Brazier, executive director of financial stability at the Bank of England (BoE), told financial risk specialists earlier this week. But, it ‘can be dangerous in excess.’
The problem with ‘in moderation’ is that no-one knows what a moderate measure of something is until they have had too much of it. Sub prime borrowers in the U. S. and property buyers in Ireland and the UK did not know they would contribute to a global debt crisis. Central bankers in Germany in the early 1920s and more recently in Zimbabwe never thought they were doing something that would be as detrimental as it ultimately was.

This post was published at Gold Core on July 26, 2017.