Household Debt Set To Rise Higher than Before Financial Crisis

A new Government report forecasts British household debt is to become higher than on the eve of the global financial crisis.

The Office for Budget Responsibility (OBR) have published ‘Economic and Fiscal Outlook’, a report forecasting an increase in the household debt to income ratio. The date presents the household debt ratio rising to 184% of incomes – considerably bigger than the 169% ratio of 2008 before the global financial crisis.

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Household gross debt to income forecast from the Office for Budget Responsibility’s ‘Economic and Fiscal Outlook’

The OBR previously made a forecast in March. Now the level of gross household debt is expected to be approximately £174 billion higher by the beginning of 2019 than predicted in March. The revised level is due to factors including an upward revision to household income, with the level of household disposable income now forecast to be 1 ¼% higher than expected in March, following upward revision to historical data which more than offset a weaker forecast for wage growth.

Read here for more information on rising household debt.