Saturday, April 2, 2011

Peasants required to borrow more over the next 4 years

Ministers admit family debt burden is set to soar

The Office for Budget Responsibility has raised its forecast of total household debt in 2015 by a staggering £303bn since late last year, in the belief that families and individuals will respond to straitened times by extra borrowing. To balance the books and shift debt from the government to the private sector requires every household on average to increase it's debt level by £11018 over the next 4 years whilst real personal disposable incomes are forecast to increase by a meagre 1.3%.

Posted by enuii @ 10:07 PM (1927 views)
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11 thoughts on “Peasants required to borrow more over the next 4 years

  • mark wadsworth says:

    Are they mental? Who’s going to lend it to them?

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  • 1. mark wadsworth said… Are they mental? Who’s going to lend it to them?

    ~ The taxpayer of course.

    More funny money expansion? The fraud will continue no matter what, whilst the slice of the pie is guaranteed and the people remain

    in passivity through engineered financial dependency the roulette wheel keeps on a spinning.

    “Don’t take it personally, this is strickly business. Sounds like a vicious circle to me buddy!”

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  • fallingbuzzard says:

    We

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  • “In the Commons, Labour MP Chuka Umunna raised the issue of the hidden household debt figures with Osborne, accusing him of transferring debt to the overdrafts and credit cards of ordinary families.”

    The cost of servicing (never mind repaying) all government deficit spending is ultimately passed on to taxpayers. If the government borrows more, taxpayers must pay more. We’re reaping the fruits of past borrowing.

    “Tony Dolphin, senior economist at the IPPR thinktank said: “This is the downside of the chancellor’s deficit reduction plan. As tax increases and public spending cuts squeeze households’ disposable incomes, they will be forced to take on more and more debt in an attempt to maintain their living standards.

    “George Osborne talks of rebalancing the economy away from debt-fuelled government and household spending and towards exports and investment but the OBR’s figures show his austerity programme will force households to take on ever more debt just to make ends meet. The future growth in the economy that is needed to bring unemployment down will only come about if we choose to live beyond our means.

    Lost for words.

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  • Who’s going to lend it to them? Enter the likes of QuickQuid.co.uk with their 1734% APR, or Wonga.com with an APR of 4214%. I hear loan sharks are doing well too lately.

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  • 4. drewster

    You could be a little more subtle, this isn’t facebook. lol

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  • general congreve says:

    = More financial stress = more defaults = more bank bailouts = more ZIRP, more QE = more inflation + more taxes = more financial stress!

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  • “The Office for Budget Responsibility has raised its prediction of total household debt in 2015 by a staggering £303bn since late last year, in the belief that families and individuals will respond to straitened times by extra borrowing.”, Err, no, the banks have reined in their lending and people are paying down their debts.

    The government is starting to panic because their spending is outpacing the increase in tax receipts:
    http://www.telegraph.co.uk/comment/columnists/christopherbooker/8423832/Cuts-What-cuts-Spending-is-rising.html
    Inflation driving up government costs is no doubt the elephant in the room that the government was not expecting. It means even higher levels of austerity and still the deficit must be reduced to 80bn by 2014. A total saving of 200bn+ over 3 years is not going to be easy when operating costs are rising. The exchange rates are now reflecting the situation with the pound being hammered. Interest rates must rise this month, otherwise there will be a fiscal crisis in my opinion with the government not able to pay their workers (just like what happened in the US and briefly in Ireland).

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  • 6. miken said…Inflation driving up government costs is no doubt the elephant in the room that the government was not expecting.

    ~ Are you sure? Myself as with many others on this site predicted inflation ages ago. I also predicted ever higher oil prices months ago.

    Sorry, it doesn’t wash. Mervyn must have known and was probably rubbing his hands at the news.

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  • Contary to popular belief, Central banks love inflation (it’s what they do best) just so long as the little people don’t twig on to their intent.

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