Unsecured Consumer Credit Tops £200bn For First Time Since 2008
Borrowing totals for UK tops £200bn for the first time since the global financial crisis. This consists of overdrafts, credit cards, loans and overdrafts.
With Britain’s financial watchdog hounding in to rein in the expanding consumer debt, it’s clear to see that the figures published by the Bank of England have mounted pressure on regulators to oversee the current flux over borrowing.
This has come around very soon after the announcement of a change to the charges we are faced with on a personal level from borrowing. We have all heard the stories about the ‘rick-rolling’ overdraft fees and the worry this brings us all when we do our best to control our spending.
There has never been a time where we have been so conscious of money and the effects that overspending can have on us all. It couldn’t be better timing with the Financial Conduct Authority, who commented to say it was cracking down on the high cost of overdrafts and would review the car loan market, which has recently started to boom.
In effect we should have seen this coming, especially seeing as throwing £1.5bn is now seen as a sign of bridge building, when the government needs more friends to make up their numbers. There was no other viable way for the conservative government to keep their mad house going any further without this bought-support.
The new figures produced by the Bank of England showed that unsecured consumer credit, including credit cards, car loans, and overdrafts has risen by 10% in the year to June 2017. This figure hit £200.9bn.
We only have to go back a decade to see when we saw this type of borrowing across the nation, December 2008, and the total fell gradually over the years but started climbing again in 2014.
It goes without saying that the large majority of the UK population have had hardship acclimatising to the rise in living costs. The question here is, have the banks been pretty reckless in giving out all of this ‘money’ that piles on interest beyond the means capable of repayment by the borrower?
With a small sum like £100 resulting in almost £90 in interest, it’s clear to see that any amount of money you wish to borrow, you’ll be paying at least 75% on top of the original amount laid on top.
There seems to be littler talk of the £465bn of Quantitative Easing which was delivered through Gilt Asset Purchases, and the effects this has had on the financial industry both for the big businesses and the consumer. It seems that all this money is created for the purpose of borrowing for the BIG companies and not so much for the smaller enterprises, which have to scrimp and save on a monumental level, before declaring bankruptcy through a caveat of borrowing funds to keep head-above-water.
If this latest news tells us anything, it is to batten down the hatches and prepare for a financial storm which we may have already seen the naked thread of before during our last recession.
Many of us don’t have this fabled ‘magic money tree’ standing firm in the back garden hidden behind the rushes of pocket change. With over 2.2 million borrowers now in financial distress, the chances are that these individuals are young, parents, unemployed and not privvy to Eaton education. Financial management simply is not educated enough nationwide, let alone globally, so we feel very strongly about making sure everyone has a fair chance to succeed and prosper to their ultimate potential.