Errol Posted October 29, 2012 Share Posted October 29, 2012 (edited) Consumer borrowing surges in September Consumers in the UK took on £1.7bn of debt in September – almost three times the average of the previous six months – driven by the biggest surge in unsecured borrowing in more than four-and-a-half years. "If consumers are becoming more prepared to spend – helped by recent healthy employment growth, lower overall inflation and an edging up in earnings growth from the lows seen earlier in 2012 – then there is a real chance the economy can continue to grow following the third-quarter rebound in GDP." - lol at this - suggesting that spending with debt is in any way positive! http://www.guardian.co.uk/money/2012/oct/29/consumer-borrowing-surges-september Ahh yes, the sweet taste of recovery. More people building greater claims on their future income. We certainly have a rosy future to look forward to! Edited October 29, 2012 by Errol Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted October 29, 2012 Share Posted October 29, 2012 Consumer borrowing surges in September Consumers in the UK took on £1.7bn of debt in September – almost three times the average of the previous six months – driven by the biggest surge in unsecured borrowing in more than four-and-a-half years. "If consumers are becoming more prepared to spend – helped by recent healthy employment growth, lower overall inflation and an edging up in earnings growth from the lows seen earlier in 2012 – then there is a real chance the economy can continue to grow following the third-quarter rebound in GDP." - lol at this - suggesting that spending with debt is in any way positive! http://www.guardian....urges-september Ahh yes, the sweet taste of recovery. More people building greater claims on their future income. We certainly have a rosy future to look forward to! " There was an increase in the number of mortgages approved in September to 94,385 from 90,023 in August. The number of loan approvals for house purchase reached 50,024, higher than the previous six-month average of 48,832. The number of approvals for remortgaging also increased, totalling 28,343 compared to the previous six-month average of 27,664. A price war on mortgages for borrowers with 40% to put down as a deposit, combined with an increase in the standard variable rate at Santander, may have prompted borrowers to move their loan to a new rate." odd that, three times as many mortgage approvals as actual sales? Quote Link to comment Share on other sites More sharing options...
Errol Posted October 29, 2012 Author Share Posted October 29, 2012 The comments on the linked article are good as well. Most people seem to agree that this is insanity. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted October 29, 2012 Share Posted October 29, 2012 I'd say borrowing at the moment is a sign of desperation. My mate cashed in his endowment policy last year...it's now spend. He just sold his car...the money from that wont last long...he's running out of options and is planning to sell next year ( after trying last year for 6 months with 1 viewing and no offers ). What's next for him....debt ? Quote Link to comment Share on other sites More sharing options...
council dweller Posted October 29, 2012 Share Posted October 29, 2012 Bad news spun as good. People have burned through their savings and are borrowing on the back of next years recoverreh. Quote Link to comment Share on other sites More sharing options...
Monkey Posted October 29, 2012 Share Posted October 29, 2012 Isnt this just over streached people, using these wonga style "payday" loans, as apposed to "normal" style of lending. desperation does not lead to a recovery Quote Link to comment Share on other sites More sharing options...
frederico Posted October 29, 2012 Share Posted October 29, 2012 Reality is going to hurt Quote Link to comment Share on other sites More sharing options...
nmarks Posted October 29, 2012 Share Posted October 29, 2012 Is it borrowing just to cover day to day expenses such as food and utility bills? Quote Link to comment Share on other sites More sharing options...
winkie Posted October 29, 2012 Share Posted October 29, 2012 (edited) Is it borrowing just to cover day to day expenses such as food and utility bills? If it is it will be exactly like giving themselves a pay cut, because next month they will require more just to stand still, and so it goes on...ask greece. Edited October 29, 2012 by winkie Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted October 29, 2012 Share Posted October 29, 2012 If it is it will be exactly like giving themselves a pay cut, because next month they will require more just to stand still, and so it goes on...ask greece. Not a sustainable path if people are doing this. Quote Link to comment Share on other sites More sharing options...
doomed Posted October 29, 2012 Share Posted October 29, 2012 I really wish this madness would all hurry up and end! Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted October 29, 2012 Share Posted October 29, 2012 It's voters obeying their government. As Labour MP Chuka Umunna highlighted at the Treasury Select Committee earlier today, it shows that household debt is set to rise from £1,560bn in 2010 (160% of household income) to £2,126bn in 2015 (175% of income) – an increase of 36.3%. By 2015 UK households will have amassed over two trillion pounds worth of debt. The household debt-to-income ratio (the best measure of how manageable the debt burden is) fell from 2007 until 2010. It is now forecast to start rising again. Osborne described pre-crisis household debt-to-income ratios as unsustainable – and yet the ratio is forecast to hit a new all-time high in 2015. More damagingly for Osborne, the OBR forecast for June 2010 (pdf) – before his first budget – predicted that household debt in 2014 would stand at £1,718bn. But following two Osborne budgets that number has now been revised up to £1,963bn – an increase of £245bn. In other words as a result of Osborne’s policies the direct debt burden on UK households is set to increase by nearly a quarter of a trillion pounds in the next three years. http://falseeconomy.org.uk/blog/household-debt-up Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted October 29, 2012 Share Posted October 29, 2012 "If consumers are becoming more prepared to spend – helped by recent healthy employment growth, lower overall inflation and an edging up in earnings growth from the lows seen earlier in 2012 – then there is a real chance the economy can continue to grow following the third-quarter rebound in GDP." - lol at this - suggesting that spending with debt is in any way positive! They never learn, do they. We've already had one crash due to debt growing far faster than output within the last 5 years. What makes them think it will be different this time? Theres no where to go with interest rates this time. No taking them down to zero to postpone reality. Rates are already there. If this carries on, and blows up, and it will, there will be no ability for govt intervention, no hiding, just collapse. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted October 29, 2012 Share Posted October 29, 2012 "If consumers are becoming more prepared to spend – helped by recent healthy employment growth, lower overall inflation and an edging up in earnings growth from the lows seen earlier in 2012 – then there is a real chance the economy can continue to grow following the third-quarter rebound in GDP." - lol at this - suggesting that spending with debt is in any way positive! They never learn, do they. We've already had one crash due to debt growing far faster than output within the last 5 years. What makes them think it will be different this time? Theres no where to go with interest rates this time. No taking them down to zero to postpone reality. Rates are already there. If this carries on, and blows up, and it will, there will be no ability for govt intervention, no hiding, just collapse. The aim is to ensure that doesn't happen when you are in power. Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted October 29, 2012 Share Posted October 29, 2012 It's voters obeying their government. Has Mr Umamma been getting his economics figures from Ed Balls again? Naughty boy. Household debt been on a (slight) downward trend since 2008. Quote Link to comment Share on other sites More sharing options...
durhamborn Posted October 29, 2012 Share Posted October 29, 2012 Is it borrowing just to cover day to day expenses such as food and utility bills? Id say so.Notice they add in a growth in overdrafts.So seems to me more overdrafts are being used until pay day.Someone who had £300 overdraft pay day might now have £1000.Be interesting to see the split between loans and overdraft growth. How do they sell overdraft growth as a good thing?People are getting desperate i think.You can see it in peoples faces.My partners friend has just moved out of her house into a rental,couldnt afford the mortgage and her hubby (split up) is on the sick and wont/cant pay anything towards it.,,£75k on a house worth around that,bought for £23k MEWed up for holidays to Florida and new kitchen etc.She didnt even try to sell,just stopped paying the mortgage and moved out. No doubt the bank will sell it for less than she owes then chase her for £££ that are now racking up in defaults. She is ok for now as she is getting a lot of the rent paid and tax credits,but they stop in two years. So her rent in two years will be bigger than her mortgage that she defaulted on with £420 less income due to losing her tax credits.Its everywhere you look.Huge swathes of the population in serious financial trouble,and a good chunk brought on by themselves and the great house price ponzi. Next door to me cant pay the bills,£70k mortgage on £130k house,(and falling) and £30k in loans,for 2 holidays,conservatory and car.She lost tax credits earlier in the year and tried to MEW to get the £30k,bank said no chance,,was going to default the loans but they are with the same bank as the mortgage and citizens advice said they will bang a charging order on the house,then repo when you default (she had never heard of charging orders),on pay day ofter loans,mortgage and utilities has £18 left for the month for food and to run a car.She asked me to help but i cant see any way out but to sell the house clear the debts and buy a small terrace house (£60k) but she said no i love this house So shes now missig payments on the loans and house and the debts shooting up. Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted October 29, 2012 Share Posted October 29, 2012 Has Mr Umamma been getting his economics figures from Ed Balls again? Naughty boy. Household debt been on a (slight) downward trend since 2008. It said: "The household debt-to-income ratio (the best measure of how manageable the debt burden is) fell from 2007 until 2010. It is now forecast to start rising again " The forecast figures are from the OBR Quote Link to comment Share on other sites More sharing options...
zugzwang Posted October 29, 2012 Share Posted October 29, 2012 Unsecured debt is not connected to bank base rates it is connected to credit card and over draft rates. So either people are confident that they will be earning more even as energy, petrol food etc rise and are spending knowing that they are in control and can afford to pay the high credit card / overdraft interest rates or they are having to borrow to pay for energy, petrol, food etc. And people must be really rich to use the services of wonga and other pay day loan companies; I certainly can't afford 4000% per annum interest rates or even 25% credit card rates. Nobody else can either. I like the term 'distress spending'. Or usury, of course, if you look at it the other way. Quote Link to comment Share on other sites More sharing options...
nmarks Posted October 29, 2012 Share Posted October 29, 2012 It's voters obeying their government. The precise opposite of what should be happening. Quote Link to comment Share on other sites More sharing options...
Paece Posted October 29, 2012 Share Posted October 29, 2012 Id say so.Notice they add in a growth in overdrafts.So seems to me more overdrafts are being used until pay day.Someone who had £300 overdraft pay day might now have £1000.Be interesting to see the split between loans and overdraft growth. How do they sell overdraft growth as a good thing?People are getting desperate i think.You can see it in peoples faces.My partners friend has just moved out of her house into a rental,couldnt afford the mortgage and her hubby (split up) is o the sick and wont/cant pay anything towards it.,,£75k on a house worth around that,bought for £23k MEWed up for holidays to Florida and new kitchen etc.She didnt even try to sell,just stopped paying the mortgage and moved out. No doubt the bank will sell it for less than she owes then chase her for £££ that are now racking up in defaults. She is ok for now as she is getting a lot of the rent paid and tax credits,but they stop in two years. So her rent in two years will be bigger than her mortgage that she defaulted on with £420 less income due to losing her tax credits.Its everywhere you look.Huge swathes of the population in serious financial trouble,and a good chunk brought on by themselves and the great house price ponzi. Next door to me cant pay the bills,£70k mortgage on £130k house,(and falling) and £30k in loans,for 2 holidays,conservatory and car.She lost tax credits earlier in the year and tried to MEW to get the £30k,bank said no chance,,was going to default the loans but they are with the same bank as the mortgage and citizens advice said they will bang a charging order on the house,then repo when you default (she had never heard of charging orders),on pay day ofter loans,mortgage and utilities has £18 left for the month for food and to run a car.She asked me to help but i cant see any way out but to sell the house clear the debts and buy a small terrace house (£60k) but she said no i love this house So shes now missig payments on the loans and house and the debts shooting up. A female relative has just gone down to 4 days work per week from 5 due to changes in benefit thresholds, less work but less income too. She kicked the husband out after 25 years of marriage last year; they have two houses, one bought at £180k and the other at £30k, each house currently has outstanding mortgages of £150k, there may be some unsecured debt too. Don't know what the money went on, they only bought one car and went to Portugal once. Quote Link to comment Share on other sites More sharing options...
jaspers Posted October 29, 2012 Share Posted October 29, 2012 (edited) Id say so.Notice they add in a growth in overdrafts.So seems to me more overdrafts are being used until pay day.Someone who had £300 overdraft pay day might now have £1000.Be interesting to see the split between loans and overdraft growth. How do they sell overdraft growth as a good thing?People are getting desperate i think.You can see it in peoples faces.My partners friend has just moved out of her house into a rental,couldnt afford the mortgage and her hubby (split up) is on the sick and wont/cant pay anything towards it.,,£75k on a house worth around that,bought for £23k MEWed up for holidays to Florida and new kitchen etc.She didnt even try to sell,just stopped paying the mortgage and moved out. No doubt the bank will sell it for less than she owes then chase her for £££ that are now racking up in defaults. She is ok for now as she is getting a lot of the rent paid and tax credits,but they stop in two years. So her rent in two years will be bigger than her mortgage that she defaulted on with £420 less income due to losing her tax credits.Its everywhere you look.Huge swathes of the population in serious financial trouble,and a good chunk brought on by themselves and the great house price ponzi. Next door to me cant pay the bills,£70k mortgage on £130k house,(and falling) and £30k in loans,for 2 holidays,conservatory and car.She lost tax credits earlier in the year and tried to MEW to get the £30k,bank said no chance,,was going to default the loans but they are with the same bank as the mortgage and citizens advice said they will bang a charging order on the house,then repo when you default (she had never heard of charging orders),on pay day ofter loans,mortgage and utilities has £18 left for the month for food and to run a car.She asked me to help but i cant see any way out but to sell the house clear the debts and buy a small terrace house (£60k) but she said no i love this house So shes now missig payments on the loans and house and the debts shooting up. All my neighbours are pensioners. One new extension being built, one garden landscaped, someone getting a new drive, I'm getting a new door… Edited October 29, 2012 by jaspers Quote Link to comment Share on other sites More sharing options...
Guest eight Posted October 29, 2012 Share Posted October 29, 2012 Don't know what the money went on, they only bought one car and went to Portugal once. Pretty easy to lose £10k/year on just "little luxuries". If everybody started spending within theirs mean (as we have) it would be retail armageddon. Quote Link to comment Share on other sites More sharing options...
Paece Posted October 29, 2012 Share Posted October 29, 2012 Pretty easy to lose £10k/year on just "little luxuries". If everybody started spending within theirs mean (as we have) it would be retail armageddon. Agree. I think in this case most of it went on wine, kebabs and superkings fags. The female relatives latest plan is to sell the house that has approx. £100k equity (the other has nil equity I'd say) and buy a flat - for her, the two teenage kids and the dog. Quote Link to comment Share on other sites More sharing options...
durhamborn Posted October 29, 2012 Share Posted October 29, 2012 Agree. I think in this case most of it went on wine, kebabs and superkings fags. The female relatives latest plan is to sell the house that has approx. £100k equity (the other has nil equity I'd say) and buy a flat - for her, the two teenage kids and the dog. Is she still getting tax credits for the two kids?The amount of people im seeing who sink as soon as the kids turn 18 is amazing.Seems as if as soon as the tax credits stop their income drops below whats going out.Almost like they ran their finances expecting the £200 a week to go on forever. It shows the affect of tax credits though.Two kids full time minimum wage job £1700 a month take home,kids hit 18 £950 take home. The few iv seen already go under were in this bracket and their outgoings were around the £1000 a month mark,mortgage/rent/bills/car so as soon as the tax credits ended boom. Of course they are also now paying higher tax to pay for the next bunch of tax credit claims.If Brown had raised the tax threshold to £18k instead of tax credits a lot of this wouldnt be happening.But that wouldnt tie you to the state i guess. Quote Link to comment Share on other sites More sharing options...
doomed Posted October 29, 2012 Share Posted October 29, 2012 Is she still getting tax credits for the two kids?The amount of people im seeing who sink as soon as the kids turn 18 is amazing.Seems as if as soon as the tax credits stop their income drops below whats going out.Almost like they ran their finances expecting the £200 a week to go on forever. It shows the affect of tax credits though.Two kids full time minimum wage job £1700 a month take home,kids hit 18 £950 take home. The few iv seen already go under were in this bracket and their outgoings were around the £1000 a month mark,mortgage/rent/bills/car so as soon as the tax credits ended boom. Of course they are also now paying higher tax to pay for the next bunch of tax credit claims.If Brown had raised the tax threshold to £18k instead of tax credits a lot of this wouldnt be happening.But that wouldnt tie you to the state i guess. If those figures are correct and working people actually get that much in tax credits we are even worse than i thought. How on earth is it possible to unwind that without complete collapse? Quote Link to comment Share on other sites More sharing options...
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