Issue Of The Week: How Bad Is Britain's Debt Bubble?

A decade on from the outbreak of the last financial crisis, is consumer debt now propelling us towards another?

“Take a walk down the high street today and one in every five adults passing you is in moderate to severe financial distress because of consumer debts amassed in recent years,” said Harry Wilson in The Times. In the past year, consumer credit debt in Britain has ballooned. Last week, Alex Brazier, the Bank of England’s director for financial stability, noted that the volume of credit card balances and other personal loans had surged by 10%, at a time when household incomes are rising by just 1.5% a year. He warned that lenders risk slipping into “a spiral of complacency”. The credit ratings agency Moody’s is also issuing alerts: this week it downgraded the outlook for bonds backed by British consumer debt.