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