Monday, October 31, 2011

The debt trap timebomb

"It is the scandal of which we no longer speak. Like a mad aunt in the attic, the problem is not going away, indeed it can only get worse, yet we’re encouraged to pretend that the embarrassment doesn’t exist. ... I’m referring, of course, to the obscenity that is the United Kingdom’s ballooning personal debt. It stands at £1.5 trillion, a little more than the country’s annual GDP, our national output. ...  £1,500,000,000,000 is the amount owed by individuals in the form of mortgages, overdrafts, loans and on credit cards. ... . It is perilously high, but indicates only where we are, not the direction of travel. The full horror of what is happening to household borrowing can be found tucked away on the Office for Budget Responsibility’s website. The numbers are shocking – they point to another looming crisis – which, perhaps, explains why no one at Westminster is willing to highlight them.


According to the OBR, UK personal debt will grow by nearly 50 per cent between now and the end of this parliament. Come 2015, it is forecast to reach £2.12 trillion pounds. How can this be right? The average British adult already owes £29,500, about 123 per cent of average earnings. I thought we were meant to be getting a grip, not letting rip."

From http://www.telegraph.co.uk/finance/comment/jeffrandall/8859082/The-debt-trap-time-bomb.html

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