Saturday, Dec 22, 2012
High Debt, Flat Wages and Rising Interest Rates but what about Inflation
Article discusses Food Banks but contains much more than the title suggests. Excellent underpinning information comes from various sources including the Resolution Foundation who are well worth checking out. The foundation calculates that millions of households with low to middle incomes will be pushed close to the edge if they are unable to reduce their debts, before the cost of borrowing returns to more normal levels. Inflation is also mentioned but the connection is not made to the double edged sword the UK is balanced on especially when 2.4 million households with a mortgage (one in five) are spending more than 25% of their gross income on mortgage repayments when interest rates are at just 0.5%. Before the 2000s debt boom only 15% of households were in this position when IRs were 7%.
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