People are continuing to pay down their debts

PaulF81

whilst this level of deleverage is in vogue, interest rates will go nowhere. As for the banks, one would expect them to be rather grateful bearing in mind the level of exposure they have to eurozone debt. Not to mention repaying SLS and also the additional requirements of Basel ii and the requirements of Glass-Steagall Mk2.

Thrugelmir

CLAPTON wrote: »

unsuccessful companies go out of business and new ones arise to replace them (otherwise we would all be hunter gathers)

do you really think reducing debt is a bad thing
or do you think expanding debt is a good thing
or is our current level of debt exactly right?

Agree with your point in principle. Though the question has to be why are so many burdened with excessively high levels of debt. As its the servicing of debt which is the root which is the real problem. Thomas Cook being a good example with a £1 billion of debt. How does a travel agent amass a debt level of this magnitude. Premier Foods being another which springs to mind.

Catch 22. Reduce debt = lower growth. Debts levels are too high but without growth austerity will last longer and be deeper.

Reducing debt levels are envitable. If for little more reason than banks globally will need to retain higher reserves to comply with Basle 3 requirements. So what the credit landscape will look like in a decades time is a matter of wait and see.

homelessskilledworker

MrRee wrote: »

Good news, I'm sure everyone will agree?

"People are continuing to pay down their debts, despite High Street stores offering discounts to tempt shoppers, according to figures from the British Bankers' Association (BBA).

Retail sales grew in November but there was little demand for loans and overdrafts, the BBA said.

Credit card borrowing slightly increased, but mainly as a result of the interest due on existing debts"

Spare money, and there is plenty about, seems to be going into debt reduction.

Are we seeing a change in lifestyle choices?

You raise an interesting question here, I wonder how many people would now be in serious trouble had these low interest rates come along to save their necks.
Those people who in the last ten years started out with 5% to 10% mortgage rates and who should have been planning for the possibilty of tougher times ahead, like everyone who used to take mortgages out pre 1995.

Nobody could have imagined that base rates could have reached these low levels, it was only through pure chance that 100,000's of homeowners are not in serious trouble.

But I suspect should rates go anywhere near what they were when the original mortagage was taken out then there are going to be a lot of people in trouble.

Dan:_4

homelessskilledworker wrote: »

You raise an interesting question here, I wonder how many people would now be in serious trouble had these low interest rates come along to save their necks.
Those people who in the last ten years started out with 5% to 10% mortgage rates and who should have been planning for the possibilty of tougher times ahead, like everyone who used to take mortgages out pre 1995.

Nobody could have imagined that base rates could have reached these low levels, it was only through pure chance that 100,000's of homeowners are not in serious trouble.

But I suspect should rates go anywhere near what they were when the original mortagage was taken out then there are going to be a lot of people in trouble.

Most morgage holders are not benefiting from the BoE low base rate. The margin between this rate and mortgage rates are huge.

undetterred

Makes you laugh this place.

You get called for being in debt,then chastised for paying it down,and made out to be harming the economy.

homelessskilledworker

Dan: wrote: »

Most morgage holders are not benefiting from the BoE low base rate. The margin between this rate and mortgage rates are huge.

Oh right!!

So putting mortgage rates up a few percent won't make any difference, what world do you live on.

You get endless posters claiming that fixed rates and tracker mortgages have never been better, and that all of us poor souls who never got in when we had the chance have now missed out

Which one is it?

Dan:_4

homelessskilledworker wrote: »

Oh right!!

So putting mortgage rates up a few percent won't make any difference, what world do you live on.

You get endless posters claiming that fixed rates and tracker mortgages have never been better, and that all of us poor souls who never got in when we had the chance have now missed out

Which one is it?

You do get stressed out easy, don't you love!

Anyway, as usual, your post makes no sense. What are you asking me to confirm dear?

ILW

Dan: wrote: »

Most morgage holders are not benefiting from the BoE low base rate. The margin between this rate and mortgage rates are huge.

Mate of mine is on .5% over base tracker.

Dan:_4

ILW wrote: »

Mate of mine is on .5% over base tracker.

I wish I was

Thrugelmir

undetterred wrote: »

You get called for being in debt,then chastised for paying it down,and made out to be harming the economy.

That should make you realise how difficult a job it is, to turn the UK around. Irrespective of government.

Ultimately it requires a total change of attitude to work, money, employment. Finally expectations of entitlement. That may only come from the next generation. Not those currently intent on protecting their own interests.