BoE report reveals Britons struggling with debt

| December 15, 2008 | 0 Comments

According to the Bank of England’s latest quarterly bulletin, British households are struggling as a result of higher food and utility costs and falling house prices.

The report found that disposable income plunged this year for 71% of British households, while the number of people struggling to pay their mortgage or rent is at its highest level since 1995.

The survey, which questioned 2,500 households in late September and early October, found that Britons now have less spare cash either to spend or save.

The Bank’s chief economist, Spencer Dale, said that the average household reported that the income it had available after meeting household bills had fallen over the last 12 months and that it had saved less than it had expected.

Over half of those questioned said they had seen a drop in their available income after paying tax, debt repayments and utility bills.

Furthermore, those who had come off a fixed mortgage rate had noted a drop in disposable income due to a rise in mortgage costs.

The Bank’s survey, which was carried out by NMG Research shortly after the collapse of Lehman Brothers in September, established that total household debt in the UK has now hit £1.6 trillion.

Meanwhile, other surveys have revealed a slump in consumer confidence which has led to a downturn in consumer spending. This is clearly being affected by the tightening of lending criteria, which is also causing consumers to struggle by not being able to obtain cheap credit.

The Bank of England survey found that 16% of households were concerned that credit might not be available to them, up from 12% in 2007.

Tags: , , ,

Comments (0)

Trackback URL | Comments RSS Feed

There are no comments yet. Why not be the first to speak your mind.

Leave a Reply

Visited 3195 times, 4 so far today