According to figures published by the Bank of England, UK Household debt has reached a record level with the raw figure for borrowing being even higher than the previous pre-recession peak.
Individuals now owe a total of £1.43 trillion, including mortgage debt, £29m above the previous high set in September 2008, just before the financial crisis and the subsequent recession although the figures are not adjusted for inflation. If this is taken into account the ratio of debt to household income has fallen from 167% at the start of the financial crisis, to 140% now.
Explanations for the increase include a willingness on the part of consumers to borrow more, confident that the recovery has taken hold or alternatively families having to borrow to deal with the higher cost of living, and to pay household bills as their disposable income continues to be stretched. Most of the debt is represented by mortgages, which have been rising steadily. Consequently some of the increase reflects the recent recovery in house prices.
Read related items on:
Bank of England