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December 17, 2004
Britons can cope with debt: for now
A report by the Bank of England suggests that Britons are generally coping well with record rising debt, having taken advantage of high house prices and low interest rates to consolidate on existing debts.
However, as reported on the BBC website: UK 'coping with debt repayments'
Low interest rates, a healthy jobs market and high house prices mean few people are having problems, it said.
But the Bank remains concerned about the long-term risks posed by personal debt - which is rising at 15% a year - if economic conditions worsen.
Also of special note is later in the report:
The rapid growth of personal debt in recent years and how people can repay it is a growing issue of debate for the Bank of England.
It is concerned about the effect of personal debt on the long-term financial stability of the UK.
In its most recent Financial Stability Review, published this December, it warned that personal debt could pose a significant long-term risk - if economic conditions change.
"If the macroeconomic outlook were to become significantly weaker, credit risks might increase, particularly on unsecured debt," it warned.
Posted by at December 17, 2004 07:23 PM
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