£19,000 plus of debt per household by 2022 according to Labour
Labour’s John McDonnell today revealed his belief that by 2022 households would be more than £19,000 in unsecured debt, excluding mortgages but including student loans - just to give an idea of the average borrowing dependency outside of borrowing on property. Most likely this isolated statement will bring little comfort to households who already are struggling with existing debts such as mortgages and credit cards that could put their credit ratings under risk.
The unsecured loans that Mr. McDonnell is referring to are the types of loans that rely solely on a borrower’s credit reputation. Most mortgages and the credit card applications would fall under this category, as credit checks will assess the amount of outstanding loans present. With the missing of payments, this directly jeopardises a borrower’s credit rating, making future unsecured loans less likely to succeed. If an existing owner of a mortgage is missing payments then they are put at considerable risk of repossession.
Office of National StatisticsinflationThis statement underpins the Bank of England’s warning to lenders to be more responsible with consumer borrowing.Mr. McDonnell, the Shadow Chancellor of the Exchequer and MP for Hayes and Harlington stated that with the current level of unsecured borrowing at £14,000 in 2017, Labour predicts an increase of this value of borrowing by £1000 every year up until 2022, which also happens to be the year of the next general election. His statements were drawn from the latest data from the would likely contribute to the pattern of dependency on borrowing. . The persistence of the public’s borrowing along with stagnant salaries that have failed to keep up with
The statement comes during this year's week of Christmas holidays, where no doubt many people must already be feeling the pinch during this usually expensive time of year, but also after the Bank of England’s recent interest rate rise and an uncertain economic future for the country.