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Mail on Sunday: Recession is looming after household debt soars

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The Mail on Sunday (which is slightly different in outlook than the Daily Mail) is going with another financial doom article this week...

Recession is looming after household debt soars as consumers borrow more to plug the gap between rising prices and falling wages, say experts

  • Consultancy Fathom Macro-economics says it is likely there will be a recession
  • Economic growth has been weakening because of the collapse in the pound 
  • The brief stint of wage growth is also over and household finances are stretched


Read more: http://www.thisismoney.co.uk/money/news/article-4720736/Recession-looming-households-feel-heat.html#ixzz4nasTlAH5 
 

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1 hour ago, Tempus said:

The Mail on Sunday (which is slightly different in outlook than the Daily Mail) is going with another financial doom article this week...

Recession is looming after household debt soars as consumers borrow more to plug the gap between rising prices and falling wages, say experts

  • Consultancy Fathom Macro-economics says it is likely there will be a recession
  • Economic growth has been weakening because of the collapse in the pound 
  • The brief stint of wage growth is also over and household finances are stretched


Read more: http://www.thisismoney.co.uk/money/news/article-4720736/Recession-looming-households-feel-heat.html#ixzz4nasTlAH5 
 

Why is this only now deemed to be an issue?  The masses have been using credit to make up for falling incomes (relative to cost of living) for over a decade.

And since when is a weaker pound bad for economic growth - currency devaluation was touted as the best thing you could do for your economic growth in the pre-Brexit days but now that you can blame it on Brexit it's suddenly bad.

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i like the snowflake remainers comments they really believe brexit caused the debt bomb that is hovering towards the uk.

fooking retards 

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34 minutes ago, Sour Mash said:

Why is this only now deemed to be an issue?  The masses have been using credit to make up for falling incomes (relative to cost of living) for over a decade.

And since when is a weaker pound bad for economic growth - currency devaluation was touted as the best thing you could do for your economic growth in the pre-Brexit days but now that you can blame it on Brexit it's suddenly bad.

Weak pound - or any other country - is not the easy getout any more.

Companies are too interconnected, the currency goes down, but the imports go up.

Net result - no better.

And a large number of the UK pop just are not in productive jobs, never mind exporting ones.

Edited by spyguy

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Our GDP is 80% services, the weak GBP is hurting the spending power of plebs like you and I, our small boost in production (just 15% of GDP) hasn't done much at all.

Edited by Barnsey

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9 minutes ago, Sour Mash said:

Why is this only now deemed to be an issue?  The masses have been using credit to make up for falling incomes (relative to cost of living) for over a decade.

And since when is a weaker pound bad for economic growth - currency devaluation was touted as the best thing you could do for your economic growth in the pre-Brexit days but now that you can blame it on Brexit it's suddenly bad.

1. We've reached peak debt levels, and lenders are now tightening. Good luck shifting your 5k balance onto another 0% card.

2. See above

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12 minutes ago, Barnsey said:

1. We've reached peak debt levels, and lenders are now tightening. Good luck shifting your 5k balance onto another 0% card.

2. See above

Have we reached peak debt?  I would have said we did in 2007/8 and look what happened then.  A brief blip and then a raft of cretinous policies designed to keep the plates spinning by transferring wealth to the elite and kicking the debt can down the line.  (And anecdotally, I'm still getting offers for interest free balance transfers.)

And what's suddenly changed - materially - that the media is telling us that weaker currencies are now a bad thing?  I'm, not defending shredding your currency, just asking why it has suddenly become 'bad' in the eyes of the mainstream media.

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7 minutes ago, Sour Mash said:

Have we reached peak debt?  I would have said we did in 2007/8 and look what happened then.  A brief blip and then a raft of cretinous policies designed to keep the plates spinning by transferring wealth to the elite and kicking the debt can down the line.  (And anecdotally, I'm still getting offers for interest free balance transfers.)

And what's suddenly changed - materially - that the media is telling us that weaker currencies are now a bad thing?  I'm, not defending shredding your currency, just asking why it has suddenly become 'bad' in the eyes of the mainstream media.

Whats changed? IR  areturning, QE is being reversed.

Gidiiots clever idea to avoid the fall out from Brown's lunacy is falling to bits.

Alwys take the hit it occurs; putting stuff off never makes it better. TheUK economy is distorted more than 2007.

 

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1 minute ago, spyguy said:

Whats changed? IR  areturning, QE is being reversed.

Gidiiots clever idea to avoid the fall out from Brown's lunacy is falling to bits.

Alwys take the hit it occurs; putting stuff off never makes it better. TheUK economy is distorted more than 2007.

 

And wages were going up nicely pre 07 crash

Edited by Barnsey

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20 minutes ago, Sour Mash said:

Have we reached peak debt?  I would have said we did in 2007/8 and look what happened then.  A brief blip and then a raft of cretinous policies designed to keep the plates spinning by transferring wealth to the elite and kicking the debt can down the line.  (And anecdotally, I'm still getting offers for interest free balance transfers.)

And what's suddenly changed - materially - that the media is telling us that weaker currencies are now a bad thing?  I'm, not defending shredding your currency, just asking why it has suddenly become 'bad' in the eyes of the mainstream media.

I think it's all herd-driven and sentiment is definitely different out there.

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9 hours ago, Barnsey said:

1. We've reached peak debt levels, and lenders are now tightening. Good luck shifting your 5k balance onto another 0% card.

2. See above

I'm not quite sure we are there yet.

I dont have any credit card debt but keep a 0% card available to cover any emergencies (boiler, roof, car etc).  I also have a halifax clarity card for using abroad for minimal currency fees. Last month i opened a new 0% card as the old one was about to expire. I cancel the old 0% card once i've got the new one. When the new card came i realised that, between the three cards in my wallet i was literally holding £24k in unused credit in my hands. 

From personal anecdotals it still seems easy enough to pick up credit card and motor lease/car loan debt. Consensus seems these are the tipping points for the economy this time, whereas the regulatory crunch has largely come on the mortgage market (which will follow downwards soon after). 

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Chillax, the UK is well prepared:

Huge government debt, interest rates that can't really go any lower, growing inflation + stagnant wages, a diabolically bad balance of trade and massive uncertainty for business and government as we leave the trading block we've been in for the last forty years.

 

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9 hours ago, spyguy said:

Gidiiots clever idea to avoid the fall out from Brown's lunacy is falling to bits.

Seven years on i am still amazed they didn't let it correct and pin it all on Labour. I Just can't imagine why they wouldn't have thrown the party and their movement under the bus. 

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39 minutes ago, regprentice said:

I'm not quite sure we are there yet.

I dont have any credit card debt but keep a 0% card available to cover any emergencies (boiler, roof, car etc).  I also have a halifax clarity card for using abroad for minimal currency fees. Last month i opened a new 0% card as the old one was about to expire. I cancel the old 0% card once i've got the new one. When the new card came i realised that, between the three cards in my wallet i was literally holding £24k in unused credit in my hands. 

From personal anecdotals it still seems easy enough to pick up credit card and motor lease/car loan debt. Consensus seems these are the tipping points for the economy this time, whereas the regulatory crunch has largely come on the mortgage market (which will follow downwards soon after). 

 agreed. We're pretty much maxed on the mortgage (in terms of what they'll let us borrow but monthly payments are fine with plenty of slack). I could in theory now go out and get us a couple of expensive cars on finance and decorate and furnish the house with a small loan etc etc.  Anecdotally i know several people whom i used to work with who did run out to buy cars on finance pretty much as soon as they'd completed on their house. 

Some people just like shiny things i guess.

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14 minutes ago, adarmo said:

Lenders scaling back zero-balance credit card transfer deals

http://news.sky.com/story/lenders-scaling-back-zero-balance-card-transfer-deals-10947142

But the Bank's latest findings showed that availability of non-mortgage lending had decreased in the past three months and credit criteria had tightened, with both trends expected to continue in the third quarter of the year.

The survey pointed to a "changing appetite for risk" among lenders and a "changing economic outlook also affecting expectations".

Tis' the direction of travel that's telling, yes you can still borrow stupidly cheap money for a little while longer but those 32 month 0% cards were recently 41-43 months.

Edited by Barnsey

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9 minutes ago, adarmo said:

Seven years on i am still amazed they didn't let it correct and pin it all on Labour. I Just can't imagine why they wouldn't have thrown the party and their movement under the bus. 

It's 1.5 correction time

4 years up 1 year down. Since 2008, 2012, it skipped 2016... 

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6 minutes ago, Barnsey said:

Lenders scaling back zero-balance credit card transfer deals

http://news.sky.com/story/lenders-scaling-back-zero-balance-card-transfer-deals-10947142

But the Bank's latest findings showed that availability of non-mortgage lending had decreased in the past three months and credit criteria had tightened, with both trends expected to continue in the third quarter of the year.

The survey pointed to a "changing appetite for risk" among lenders and a "changing economic outlook also affecting expectations".

Tis' the direction of travel that's telling, yes you can still borrow stupidly cheap money for a little while longer but those 32 month 0% cards were recently 41-43 months.

Interesting. Thank you for the link. 

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4 minutes ago, maverick73 said:

It's 1.5 correction time

4 years up 1 year down. Since 2008, 2012, it skipped 2016... 

As I've just bought but with siblings who can't I'm sort of hoping it does and it doesn't in equal measure. 

The optimal outcome for me would be for prices to stay flat in nominal terms, or fall by a few% a year then most OOs don't get screwed but over leveraged LLs with IOs do, meanwhile the hapless tenants will increasingly be able to afford to buy should they wish. 

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1 hour ago, regprentice said:

From personal anecdotals it still seems easy enough to pick up credit card and motor lease/car loan debt. Consensus seems these are the tipping points for the economy this time, whereas the regulatory crunch has largely come on the mortgage market (which will follow downwards soon after). 

Some of the terms for interest free balance transfer cards out there are crazy. Take this one for example. 43 months interest free! I don't remember terms of that length prior to the last crash? To me it just smacks of desperation & a sign it's getting harder to keep pumping debt down the consumers throat. We're already eaten tomorrow's lunch, now they're trying to eat next week's menu! 

 

IMG_4266.PNG

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7 minutes ago, SOLZHENITSYN said:

Some of the terms for interest free balance transfer cards out there are crazy. Take this one for example. 43 months interest free! I don't remember terms of that length prior to the last crash? To me it just smacks of desperation & a sign it's getting harder to keep pumping debt down the consumers throat. We're already eaten tomorrow's lunch, now they're trying to eat next week's menu! 

 

IMG_4266.PNG

That's amazing. 

What's more amazing is their 123 accounts pay 1.5% up to 20k. obviously there's a charge for cash advances though. 

I guess there's some horrendous charges of rolled up interest if you miss the repayment deadline. 

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18 minutes ago, adarmo said:

That's amazing. 

What's more amazing is their 123 accounts pay 1.5% up to 20k. obviously there's a charge for cash advances though. 

I guess there's some horrendous charges of rolled up interest if you miss the repayment deadline. 

The sums have never quite added up for me. I can get 1% elsewhere, instant access, with no strings attached, so it's not worth messing around with direct debits for the extra 0.5% on £20k.

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12 hours ago, Tempus said:

The Mail on Sunday (which is slightly different in outlook than the Daily Mail) is going with another financial doom article this week...

Recession is looming after household debt soars as consumers borrow more to plug the gap between rising prices and falling wages, say experts

  • Consultancy Fathom Macro-economics says it is likely there will be a recession
  • Economic growth has been weakening because of the collapse in the pound 
  • The brief stint of wage growth is also over and household finances are stretched


Read more: http://www.thisismoney.co.uk/money/news/article-4720736/Recession-looming-households-feel-heat.html#ixzz4nasTlAH5 
 

Anecdotal but my mother-in-law is an avid Daily Mail reader and getting her copy is part of her daily routine. But she now says she's not so sure about it and "the stories they put in it for you"- and is starting to buy it less. 

This is a big change I reckon, because if she is now questioning and doesn't think it's overall content stacks up any more with what she hears out there in the real world, there must be others whose sentiments are changing just as much.

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