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Biriani

The Economist Warns On Consumer Debt

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Since it seems to be a theme at the moment, here's an article in this week's Economist on the dangers of consumer debt (fulltext also available to non-subscribers)

Not waving but drowning

It's not too soon to worry about consumer debt

http://www.economist.com/research/articles...3DWPS%2520%250A

Barclays, Britain's third-largest bank, said this week that its bad-debt provisions had jumped by 44% last year as more credit-card borrowers missed payments on ever-larger debts.

...

Though bad debts are ballooning on credit cards (see chart), mortgage arrears have fallen and repossessions remain low compared with the not-too-distant past.

...

The Bank reckons that unsecured loan losses would have to rise “substantially” to threaten the financial stability of the nation's banks. But there are some disturbing signs that just such an increase may be in the making.

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the Financial Services Authority (FSA) estimates that some 2m families are “constantly struggling, but not currently in arrears” with their debts

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“There is a pool of people out there with no hope of ever paying off their debts.”

...

it wouldn't take much to push large numbers of borrowers over the edge

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What???

Threaten the stability of banks... that's fiscal meltdown.

Credit would tighten and cause a HPC years before this.

I hope the banks aren't threatened. Then we're all screwed.

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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