Tuesday, 23 October 2007
Debt collectors preparing to call on us all....
I spotted an excellent article in the under-rated The Business magazine. Here is the first paragraph:
"THE government’s private finance initiative (PFI) liabilities have rocketed 14.5% to £181bn ($368bn, E260bn) over the past 10 months, according to information buried in the pre-Budget report (PBR)."
That is a huge jump for an economy expanding at 3% per annum at best.
Add this to the the £1,363 billion in personal debt and the £574 billion in Government debt.
This brings it to a grand total of £2,118 billion of total debt.
This translates to £84,720 of debt per household (the best measure as it approximates net taxpayers best of all).
This is a huge amount, the interest on this alone must be something in the order of £6000 per year or £500 a month!
No surprise then that the graph above shows a rapid rise in insolvencies.
Of course some of this is long-term debt and mortgages account for half of this burden.
Nonetheless we are in a difficult position debt wise and the boom of the last few years has clearly been financed by both increased mortgage borrowing of up to £200 billion and Government spending of another £200 billion.
There is no way to finance us out of a recession now; so I bet Brown and Darling are praying somehow that we avoid one