BRITAIN’S PERSONAL DEBT REACHES RECORD HIGH – The Bank of England has now revealed that Britain’s mounting personal debt has reach a new record high; the British public now owe £1,429,624,000,000.
The figure of over £1.4 trillion is some five times the national income and again fuels fears that Britain will join Greece, Spain, Italy, Portugal and Ireland but with far more catastrophic consequences.
Despite the financial crises of 2008 the public have continued to borrow, often racking up huge credit card bills and taking on mortgages that will almost certainly bankrupt them with even a small increase in interest rates.
Some are viewing the rise in consumer debt as a sign of increased consumer confidence whilst other view it as the only way to sustain and maintain a certain lifestyle as prices rise and wage increase fall far below the rate of inflation.
In a recent article on meebal.com we examined the consequences of the Black Friday shopping spree in which consumers flocked to buy discounted goods and where almost all of the spending consisted on accumulating more debt.
The Bank of England states that the figure does not take into consideration of inflation and that it noted that debt in terms of the percentage of household income is not in fact at a record high.
Some experts will almost certainly lambaste the Bank of England for no matter how you dress up debt it still remains debt and with the Bank of England’s assessment at £1,27 trillion it still remains over four times the national income – we are literally drowning in debt.
The Bank of England went on to say that in September 2008, just before the financial crisis devastated the financial institutions the national debt stood at £1,429,595,000,000.
Moreover it was revealed that mortgage approvals where now at their highest levels in nearly 6 years with over 67,000 mortgages being approved in October 2013 with a value exceeding £10.5 billion.
The Bank of England has announced that it will attempt to slow the property market as house prices are climbing too fast; this will be achieved by refocusing the lending scheme towards helping small businesses borrow instead of homeowners.
The Chancellor George Osborne met with the Bank of England Boss Mark Carney and agreed that the bank should introduce such measures to ‘cool’ the housing market and ultimately help small businesses to grow.
Despite these measure the housing market could still grow as David Cameron’s ‘Help to Buy’ scheme continues its extension in order to help first-time buyers get on the property ladder; this could of course have an adverse affect as some fear that it will push up house prices therefore forcing buyers into larger mortgages which may become unsustainable if interest rates rise.
It certainly appears to be a mixed message as the Bank of England attempts to slow down housing prices whilst David Cameron’s plans could well fuel further rises.