Our response to the latest Bank of England Money and Credit Statistics

_{29 November, 2017}

Responding to the latest report from the Bank of England, Peter Tutton, Head of Policy at StepChange Debt Charity, said:

"Despite a slight slowdown, consumer credit continues to grow strongly, outpacing incomes. Warning signs remain. Yesterday the Bank of England reiterated how lenders may be underestimating the losses they may face in a downturn.

While consumer credit represents only 7% of banks’ exposure, it amounts to 40% of impairments in the Bank’s stress test¹.

This comes against the backdrop of forecasts of the longest sustained period of falling living standards since the 1950s², so the fact that 9 million people are currently using credit in order to cover essential costs should put tackling problem debt high on the policy agenda.

Household financial stress and growing consumer credit create a pocket of risk which policy action can help to close.

Regulators need to ensure consumer credit lending is responsible and affordable for households; and with the Government now committed to introducing a Breathing Space scheme to help people manage problem debt, it’s crucial to get it right and into existence as soon as possible.”

¹ Bank Of England Financial Stability Report, November 2017

² The Resolution Foundation analysis of Autumn Budget 2017