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Family Debts Hit All-Time High: Households Owe Nearly £9,000 Each In Non-Mortgage Borrowing

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http://www.dailymail.co.uk/news/article-3006920/Family-debts-hit-time-high-Households-owe-nearly-9-000-non-mortgage-borrowing-raising-fears-struggle-rates-rise.html

  • Credit card bills and other non-mortgage debts debts rose to all-time high
  • Total unsecured debt has broken previous peak just before financial crisis
  • It raises concerns that careful consumers are now taking risks once more
  • Total outstanding unsecured borrowing grew by nearly £20billion in 2014

Credit card bills and other non-mortgage debts rose by 9 percent to an all-time high last year, according to a report by accountants PwC.

The total unsecured debt, which works out at close to £9,000 per household, has broken through its previous peak seen just before the financial crisis.

It raises concerns that consumers who were careful to reduce borrowing during the uncertainty of the downturn are now taking risks once more.

PwC warned that many household could face a nasty shock when interest rates rise.

Interest rates increase and instant recession?

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Unsecured debt increasing at 9% p.a.

Secured debt increasing at 8% p.a.

Govt debt increasing at 6% p.a.

GDP growth ~2%

It's a miracle.

angel-therapy72.jpg

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when I first met Mrs Loo, she was 10% younger than me.

today, she is only 4.5% younger.

At this rate she will be older than me some day.

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Unsecured debt increasing at 9% p.a.

Secured debt increasing at 8% p.a.

Govt debt increasing at 6% p.a.

GDP growth ~2%

It's a miracle.

angel-therapy72.jpg

To paraphrase Lieutenant John Chard in the film Zulu;

If it's a miracle, zugzwang, it's a short term nought point five interest rate miracle.

Edited by The Spaniard

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This is what happens when the punters believe interest rates will never again rise significantly. If at all.

If the don't get the cojones to start normalising this year then they never will.

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Here's an idea. Borrow money on a0% credit card to invest in htb is a at 11% pa return. What's not to like? :\

Edited by Si1

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It's only a short time ago that they were saying that they wanted people to borrow more.

Things change when there's an election in offing.

Edited by billybong

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when I first met Mrs Loo, she was 10% younger than me.

today, she is only 4.5% younger.

At this rate she will be older than me some day.

Brilliant!

(he says as he reaches for the calculator to see how this might apply to his own Mrs....)

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To paraphrase Lieutenant John Chard in the film Zulu;

If it's a miracle, zugzwang, it's a short term nought point five interest rate miracle.

"and with a bit of QE behind it" :D

Edited by anonguest

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All Osborne has done is transferred govt debt which is ultra cheap and not a problem at all onto households when we have underemployment, low wages and an already over-leveraged household sector following the biggest fall in output in our lives.

Incredibly, he really is that stupid. Worse than that he wants to do even more.

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All Osborne has done is transferred govt debt which is ultra cheap and not a problem at all onto households when we have underemployment, low wages and an already over-leveraged household sector following the biggest fall in output in our lives.

Incredibly, he really is that stupid. Worse than that he wants to do even more.

Stupid ?

I dont think so.

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Has this growth in debt been caused / facilitated by a lowering of credit standards I wonder? If so, it is hard to imagine a situation where it unravels smoothly isn't it?

In its Q3 2014 report, Hoisington (who I make no apologies for referring to yet again) stated this of the US economy: 2014 has witnessed a resurgence of consumer auto and mortgage lending that was achieved by a lowering of credit standards. The percentage of subprime consumer auto loans (31%) returned to the peak levels reached prior to 2008. Such lending has historically turned counterproductive.

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All Osborne has done is transferred govt debt which is ultra cheap and not a problem at all onto households when we have underemployment, low wages and an already over-leveraged household sector following the biggest fall in output in our lives.

Incredibly, he really is that stupid. Worse than that he wants to do even more.

Not really the case 2010-2015......Government on balance sheet debt has risen from 0.76 trillion to 1.36 trillion pound. Households have deleveraged and debt has stayed constant around 1.5 trillion pounds. A small deleveraging from 105% of GDP to 95% of GDP.

Indeed the process of deleveraging probably ceased in Q1 of 2015 and the household sector is now supposed to take up the slack and go beyond 2007( to 120% of GDP by 2020) to keep the skittles in the air.

Edited by crashmonitor

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Stupid ?

I dont think so.

Agreed.

Not stupid. Ruthless perhaps.

Edited by Si1

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Has this growth in debt been caused / facilitated by a lowering of credit standards I wonder?

One thing for sure is, the growth is debt will be mirrored by growth in peoples ability to ever pay back the debt,

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Student debt is the killer. It didn't really exist before and for a lot of people it will be hanging over their heads for ages without much hope of ever being paid back but it's still in the figures even if for many it's something they never think about as they know it won't be paid back and they're waiting until it's wiped clean.

If they never pay it back presumeably that adds to the public debt when the debt is wiped from the former student's account.

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Student debt is the killer. It didn't really exist before and for a lot of people it will be hanging over their heads for ages without much hope of ever being paid back but it's still in the figures even if for many it's something they never think about as they know it won't be paid back and they're waiting until it's wiped clean.

If they never pay it back presumeably that adds to the public debt when the debt is wiped from the former student's account.

We have become the bankers slaves.

The funny thing is, we can break free of our shackles at any point.

This debt based economy is unstable and rewarding a minority of society, worse than that, unproductive leeches are being rewarded for doing nothing more than pushing debt and taking a percent of said pushed debt.

The bankers and their agents are making drug dealers look decent upstanding citizens at the moment.

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