Thursday, Apr 17, 2008
TDX report out today - Total UK unsecured debt is £1.3 trillion – more than the total for all of the rest of the EU put together.
Citywire: Personal debt will trigger property collapse
It’s not the same this time round. How many times have we heard that? Mortgage pundits reassure us that with full employment homebuyers won’t get into difficulties and repossessions will be nowhere near the 78,000 a year seen in the property collapse of the early nineties. But while the optimists no doubt take comfort from the fact that UK unemployment fell by 39,000 to 1.61 million in the three months to the end of February, nobody seems to notice the elephant in the room. Just as the regulators had no idea of the extent of banks’ off balance sheet financing – and failed to identify the trigger for the credit crunch which ensued – so everyone is concentrating on the wrong consumer figures.
Posted by jack c @ 07:24 PM (865 views) Add Comment
13 Comments
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1. plato said...
There is an Epidemic........ Here is one of the symptoms :
"Using credit to fund a lifestyle you can't really afford can lead to huge financial problems and if you don't keep tight control of your spending and how much you're borrowing, you can easily find you can't afford the payments and start to fall behind with them."
Don't worry ---------- Gordon and the BOE are currently working on an antidote. Happy Spending !
2. planning4acrash said...
Holy Macaroni
I have no debt and am paying off my student loan within the next two months. Yet, I will be brought down with these IDIOTS!
3. plato said...
planning4acrash
Me too (no debt that is) -- already lost 25% of my personal pension (My hard earned savings) and I haven't much time before I 'retire' (not now by the looks of things). We will all pay for these "IDIOTS" and worst of all for being responsible.
4. enuii said...
Couldn't agree more. The big picture is huge and all the journo's and sheeple are ignoring the bigger long term pension time-bomb. I you are struggling with debt now and saddled with a huge mortgage chances are that you are also not paying enough into a pension. On the flip side if you have been careful and lived within your means your hard earned pension fund or savings have also been stuffed by Gordon ( Grievous Financial Harm ) Brown, Tails you loose / Heads you loose.
5. mark wadsworth said...
Er ... total household debt (secured and unsecured) is about £1,400 billion = £1.4 trillion. Unsecured is one-tenth of that, tops, about £140 billion. As a rough guide, total GDP of UK = £1,400 billion = £1.4 trillion.
6. renting2 said...
Don't forget to factor in that 2.5% ( X 6 ?) inflation that is relentlessly squeezing the average family. It's the total spend that dictates events.
7. hpwatcher said...
I agree with all of the above. It's like the chickens have finally come home to roost. The excesses of the last 10 years are now beginning to cause pain.
It will certainly be the end of Gordon Brown, Darling and the Labour government. It's absolutely clear that they have mismanaged the economy to a criminal degree. More and more he [GB] is beginning to look like an 'impostor'...someone who looks convincing but doesn't really know what he is doing.
8. renting2 said...
hpwatcher @7 "More and more he [GB] is beginning to look like an 'impostor'...someone who looks convincing but doesn't really know what he is doing."
You mean GB is a fully qualified and certified politician!
9. drewster said...
What Mark says. If the figures sound too big to be true, then check and check again. I can't find the exact figures but evidence suggests somewhere between £100bn and £200bn. Certainly nothing like £1.3trn - that figure includes mortgage debt. According to the Times, in 2006 Britain was responsible for a third of all unsecured debt in Western Europe. That's still high, but nowhere near as high as the article suggests. This is sloppy journalism playing fast and loose with facts and figures. I expect such behaviour from politicians but not from journalists.
10. layers said...
Don't forget that in even during a hurricane the eye of the storm creates a sense that it's all over - can't help feeling that this first round will end soon and that we may have a period of upbeat news which suckers some back in before all Hell brakes loose. Could be 12 months, could be 24, but it IS happening one way or the other.
@P4aC - look on the bright side as it could be worse - at least you don't owe the rest of your life's work to the bank!
11. Soothsayer said...
Shocking to get that so wrong and write an article around it. There aren't many financial journalists who have any grasp at all on their numbers. I suppose writing and doing Maths are not a great mix.
If you want reliable (?) numbers you can find a useful compendium in the HBoS "economic factbook" on the research part of their website. The current one is only to Dec. 06 but you can find more up to date data from its sources. At Dec '06 consumer debt was £213bn, mortgage debt was £1,079bn. (Table 19).
12. Digbypenguin said...
“Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds and six pence, result misery.”
Mr Micawber
13. Micthemike said...
no thats entirely inaccurate total mortgage debt is somewhere over 1.3 trillion unsecured debt when i last checked was 212 billion. i digress from the subject the labour mp who stated that the 10p tax situation would effect the poor amazing theyve just realised it going to make the poor poorer. the mp posturing of course says im going to resign over this issue then apparently on a telephone conversation with GB decided she wasn't going to resign after all, poor lady could only be heroic for a short time.