UK Debts "biggest in the world"

Graham_Devon

Just bringing this one to the table. Feel free to dissect it in any which way you feel best.

According to the consulting firm, by the end of March this year, the aggregate indebtedness of the UK - that's the sum of household debts, company debts, government debts and bank debts - had risen to 492% of GDP, or almost five times the value of everything we produce in a single year.

That compares with 481% at the end of 2008.

So the UK's total indebtedness has increased, and is still the biggest relative to GDP of any of the big economies. That said, Japanese indebtedness is pretty much the same size - at the end of 2010, as opposed to the end of March 2011, Mckinsey says Japan's debts were also 492% of GDP.

US indebtedness is less, at 282% of GDP by the middle of this year, down from 296% in December 2008.

Found the last paragraphs most refreshing.

The point is that if excessive debt is the disease, what we've had since the end of 2008 is analgesic and sticking plaster, rather than cure.

Record low interest rates and the creation of £275bn of new money through the quantitative easing programme, has made it possible for us to live with our debts - cheap money has made the debts bearable.

But we haven't as yet found a way to get the debts down so that we can be confident that our economy's foundations are solid and sound again.

What it means is that we must brace ourselves for many years of relatively low growth, perhaps 1% versus the 3% of the 16 boom years before the crash, because we no longer have the fuel of borrowing more and more every year.

http://www.bbc.co.uk/news/business-15820601

purch

You need to stop reading the BBC website Gra.

It's not good for your ulcer :eek:

HAMISH_MCTAVISH

that's the sum of household debts, company debts, government debts and bank debts

Oh right then.

So basically of absolutely no relevance other than for dramatic hyperbole purposes.

the_flying_pig

HAMISH_MCTAVISH wrote: »

Oh right then.

So basically of absolutely no relevance other than for dramatic hyperbole purposes.

Maybe.

But being more specific our total residential mortgage debt as a % of GDP is near enough the highest there is, too.

CLAPTON

when dealing with total country debt one must be be aware that some of this debt is backed by assets. that is the UK invests in overseas countries.

System

the_flying_pig wrote: »

Maybe.

But being more specific our total residential mortgage debt as a % of GDP is near enough the highest there is, too.

Still doesn't sound very scary when you consider our owner occupancy rate is near enough the highest there is, too.

the_flying_pig

Joeskeppi wrote: »

Still doesn't sound very scary when you consider our owner occupancy rate is near enough the highest there is, too.

that was true 20 years ago but not really now.

UK home ownership is on the high side compared to much of western europe [e.g. lower than italy, spain, ireland, belgium, norway but a fair bit higher than a couple of big comparators in france & germany] but not high at all, only middling, by [say] OECD standards.

IronWolf

I take it aggregate debt is not net debt. The thing about aggregate debt is you can have money trasnferred between many different people which multiplies the number of times that debt is counted on aggregate. But the net debt would be much smaller.

For example when I deposit £6k in a bank, im loaning them £6k. They then loan this to someone else, so aggregate debt for the UK is £12k, but net debt is 0.

Graham_Devon

purch wrote: »

You need to stop reading the BBC website Gra.

It's not good for your ulcer :eek:

You'll have to extend that advice to the nation. Seems this article is the most read article at the moment on the BBC News website

purch

Sales of Gaviscon Double Action due to rocket !!! :eek:

Pimperne1

Graham_Devon wrote: »

You'll have to extend that advice to the nation. Seems this article is the most read article at the moment on the BBC News website

Good, maybe it will be a wake up call that we can't just throw money at any "good cause". All I would ask is that all current and future expenditure is "racked and stacked" and the stuff which is less necessary (at the bottom) cease and that exercise continue upwards until they reach a position where our outgoings are matched by our income.