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Britons’ consumer credit at “very elevated levels”

bankofenglandThe Governor of the Bank of England has said that interest rates will remain low, but warned against the rise of household debt.

Mark Carney said that interest rates were likely to stay low “for a considerable period of time”.

"The question in my mind is when is the appropriate time for interest rates to increase in this economy, consistent with the strength of the domestic economy," he told the Treasury Select Committee (TSC).

He also said that the rise in consumer credit was “clearly an issue”.

"More indebted households are more vulnerable - and while the level of household debt has fallen notably over the course of the last five years, it is still at very elevated levels and we don't necessarily see it reducing further.”

The dynamics in the housing market have contributed to an increase in borrowing, he said. The Bank’s chief economist said that growth in consumer borrowing, particularly on personal loans, was “picking up at a rate of knots” especially since interest rates on these loans continued to fall.

Financial Policy Committee was reported to be keeping a close eye on the rise in unsecured borrowing. One area its report, due next week, will highlight is any risks to the economy posed by the buy-to-let market.

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