What's going on here? Personal debt

Graham_Devon

Some striking data here.

The forecast by the independent Office for Budget Responsibility (OBR) led to warnings that the UK could be heading towards a credit crunch similar to that of 2008 because of unsustainable levels of borrowing and household spending.

Five years ago UK households were firmly in the black, running a surplus of £70bn as Britons tightened their belts in the wake of the financial crash and put money aside to save.

But the new OBR figures show households are now deeply in the red, as growing economic confidence has led to a national spending spree.

That's quite a move within 5 years?

What on earth is going on?

The OBR statistics showed households spent £68.9bn less than they earned in 2009-10. The figure fell to £67bn in 2010-11, £35.7bn in 2011-12 and £27bn in 2012-13. The following year Britain’s families went into the red to the tune of £12.4bn, rising to £29.4bn in 2014-15.

The OBR projects that households will spend £40bn more than they earn this year (2015-16), increasing to £40.4bn in 2016-17, £43.9bn in 2017-18, £48.6bn in 2018-19 and £49.5bn in 2019-20. Total household borrowing is set to reach £222bn over the lifetime of this parliament.

Is that in any way sustainable?!

http://www.independent.co.uk/news/uk/home-news/fears-of-new-economic-crash-as-british-families-run-40bn-deficit-a6782221.html

cells

as brown said the Americans caused the last crash and he saved the world nowt to do with bad lending or too much debt in England

Crashy_Time

Graham_Devon wrote: »

Some striking data here.

That's quite a move within 5 years?

What on earth is going on?

Is that in any way sustainable?!

http://www.independent.co.uk/news/uk/home-news/fears-of-new-economic-crash-as-british-families-run-40bn-deficit-a6782221.html

No, fun to watch though.

Graham_Devon

cells wrote: »

as brown said the Americans caused the last crash and he saved the world nowt to do with bad lending or too much debt in England

It's not what's said that's important.

The important thing is whether you are gullible enough to believe it.

the_flying_pig

resilient economy :beer:

mayonnaise

The OBR statistics showed households spent £68.9bn less than they earned in 2009-10. The figure fell to £67bn in 2010-11, £35.7bn in 2011-12 and £27bn in 2012-13. The following year Britain’s families went into the red to the tune of £12.4bn, rising to £29.4bn in 2014-15.

The OBR projects that households will spend £40bn more than they earn this year (2015-16), increasing to £40.4bn in 2016-17, £43.9bn in 2017-18, £48.6bn in 2018-19 and £49.5bn in 2019-20. Total household borrowing is set to reach £222bn over the lifetime of this parliament.

Where did that £200bn go they saved up 2009-2013?
Any idea Graham?

Graham_Devon

mayonnaise wrote: »

Where did that £200bn go they saved up 2009-2013?
Any idea Graham?

Yes. It was documented quite thoroughly if you cast your mind back.

People were paying down debts from the last splurge.

wotsthat

I was going to pay off my mortgage when the current fix ends. Might keep some of it going just in case the QE response to the next GFC is to directly pay people's mortgages off. Fingers crossed.

wotsthat

Graham_Devon wrote: »

Yes. It was documented quite thoroughly if you cast your mind back.

People were paying down debts from the last splurge.

Even in a GFC Brits are still had enough money left over to pay down debts.

I feel like humming Land of Hope and Glory.

mayonnaise

Graham_Devon wrote: »

Yes. It was documented quite thoroughly if you cast your mind back.

People were paying down debts from the last splurge.

Are you sure about that, Graham?
It sure looks like it stagnated from 08-09, but paying down?

coastline

Article from 2013-14 showing a very similar situation where household debt will rise as the government attempts to make cuts.
In 2010 Cameron was telling people to pay off their credit cards etc.

http://www.marketmoving.info/household-debt-set-increase-sharply-uk/

Just months before the financial crash the Tories were backing Labours spending plans yet they knew they had borrowed way too much in a growing economy between 2002-2007.
All about getting elected this politics stuff and theres very little between the main parties.

http://news.bbc.co.uk/1/hi/uk_politics/6975536.stm

http://conservativehome.blogs.com/torydiary/2007/09/tories-will-mat.html