Household debt

Time to put away the credit card

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The squeeze is on. National accounts data last month confirmed that household incomes have been falling for the last three quarters. Yesterday’s labour market statistics showed that wages continue to lose ground to inflation. And today new survey data from the Bank the England shows that credit availability is tightening. Today’s survey is the latest … Continued

Matthew Whittaker
Household debt
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Wealth & assets

Time for a re-rewind on debt?

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Just like Craig David, debt made something of a comeback in 2016. Having peaked at 160 per cent on the eve of the 2008 financial crisis, household debt as a share of income fell to 140 per cent by the end of 2015. Successive increases in the first three quarters of 2016 took the ratio … Continued

Matthew Whittaker
Household debt
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Monetary policy
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Macroeconomic policy

To avoid squeezed households struggling, we must beware of premature interest rate rises

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Thursday’s interest rate announcement from the Monetary Policy Committee is unlikely to generate many headlines. “Bank does nothing for 65th straight month” is hardly a circulation-booster, even during silly season. But we can expect plenty of speculation alongside the announcement that the consensus among MPC members on holding rates will have been broken for the first time since … Continued

Household debt
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Monetary policy
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Macroeconomic policy

Once interest rates start rising, how can indebted households be helped through the painful transition?

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Whether it is this autumn, the New Year or shortly after next May’s election, everyone knows that interest rates are going to start rising sometime relatively soon. Yet despite the endless “guess the month” speculation about the precise timing of the first rise, little thought has actually been given to the bigger and longer-term question … Continued

Matthew Whittaker
Household debt
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Monetary policy

The Bank’s conundrum countdown – Tightening policy in the shadow of a debt overhang

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If Mary Poppins taught us anything, it’s that a British bank is run with precision. But against a backdrop of rapidly changing and sometimes conflicting economic data, the balancing act currently facing the Bank of England requires a level of calibration rarely before seen. Clearly monetary policy must be tightened over the coming months and … Continued

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