This event examined the scale and distribution of household debt in the UK and asked how much of a risk it poses to economic growth.
It is more than four years since the UK entered recession, and whilst there are some signs of improvement, there is no doubt that the recovery has been sluggish – national output remains some three per cent below its pre-crisis level. Indeed, financial crises typically result in deep, protracted recessions as one or all of households, firms, banks and government need to pay down debts built up in the pre-crisis period, with this debt overhang acting as a drag on growth. Matthew Whittaker presented analysis of what is known about the country’s current debt profile and was joined by expert commentators to discuss the seriousness of the issue and the implications for policy.
The Deconstructing Debt project will identify how far the household debt shadow stretches in the UK and consider options for paying down debt that will both support families and allow a return to sustainable economic growth. We will be publishing further research and hosting a series of debates during the project to explore a range of options for household deleveraging.