Consumers' debts rose in May, says Bank of England

wotsthat

http://www.bbc.co.uk/news/business-18686841

Consumers increased their debts through loans, overdrafts and credit cards relatively sharply in May, according
to figures from the Bank of England.

New unsecured borrowing outstripped repayments by £732m during the month, higher than the average of the past six months of £403m.

Frightened indebted consumers on the edge needing to borrow to get through the month or a willingness to take on new debt due to an increase in confidence. Or monthly noise?

Graham_Devon

Bit of everything I'd imagine.

The overdrafts would suggest struggling.

The loans may suggest people feeling they can now afford a loan to go and buy something new and shiny. Especially since loans are getting cheaper and cheaper...so could suggest prosperity.

The credit card one is difficult. Credit cards are the easiest, but most expensive credit. I can't imagine people with access to cheaper money using credit cards as a loan....unless they have no choice...so that would probably suggest struggling again...especially alongside the overdrafts.

If you look at the Credit Action figures, certainly debt is increasing again, and has been rising over the past year. I personally can't class that as a good sign.

wotsthat

Yes there's going to be a spread. The good news is that that credit card debt has increased relatively little - possible indication that debt increases are, generally speaking, being planned.

CLAPTON

go over to the Loans board and see how many people on low incomes are asking for advice on how to borrow 10k to buy a 'reliable' car.

Graham_Devon

wotsthat wrote: »

Yes there's going to be a spread. The good news is that that credit card debt has increased relatively little - possible indication that debt increases are, generally speaking, being planned.

Do you see the level of debt increasing overall as a good thing?

I personally don't. It just brings consumption forward again, and we have seen what happens when the debt avaliability is removed again. Having more and more people, regardless of whether struggling or not, tied to debt repayments isn't a good thing going forward for the economy as a whole.

wotsthat

Graham_Devon wrote: »

Do you see the level of debt increasing overall as a good thing?

Not really but I've always had a cautious approach to debt.

That said I don't think that bringing forward consumption by the sensible use of debt is always a bad thing.

Graham_Devon

wotsthat wrote: »

Not really but I've always had a cautious approach to debt.

That said I don't think that bringing forward consumption by the sensible use of debt is always a bad thing.

Me neither. But all we have are statistics, at a time when we know families are struggling. We can't therefore decide the people taking on this debt are using it for sensible spending.

Theres crisis spending. Spending like has been mentioned. Were still in the want it now arena.

wotsthat

Graham_Devon wrote: »

Theres crisis spending. Spending like has been mentioned. Were still in the want it now arena.

That's an opinion and it's only a months data.

Graham_Devon

wotsthat wrote: »

That's an opinion and it's only a months data.

Consumer debt has been rising for a couple of years now.

And the want it now opinion is an opinion you very much share as soon as any babyboomer thread appears and everyone under babyboomer age is a drivelling spending freak wanting everything yesterday.

wotsthat

Graham_Devon wrote: »

And the want it now opinion is an opinion you very much share as soon as any babyboomer thread appears and everyone under babyboomer age is a drivelling spending freak wanting everything yesterday.

I'm under baby boomer age:).

Graham_Devon

wotsthat wrote: »

I'm under baby boomer age:).

That's nice. And it's also nice to see you didn't disagree

It's funny. WHen it comes to this sort of figure, you want to push the "it could be sensible spending" route.

When it comes to most other things, you want to suggest people are out spending on iphones, nights out, designer clothes.

Your opinion seems to be at war with itself, dependant on how you wish to view a certain issue.