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UK has second highest debt in world


The UK’s personal debt means that the country now has the second-highest level of household debt relative to GDP in the world, according to consultancy McKinsey.

Only Japan, which has a personal debt level of 512 per cent of GDP stands higher than the UK. Personal debt for this country equates to 507 per cent GDP, a figure which is approximately five times the value of the goods and services we produce per year.

The research predicts that “the ratio of UK household debt to disposable income would not return to its pre-bubble trend for up to a decade”.

McKinsey added that only three of the ‘mature’ economies around the world have seen their debt to GDP ratio fall over the past two years – Australia, the US and South Korea.

According to the BBC’s Robert Peston, the report “implies that as we in the UK look for a return to more normal levels of economic growth, momentum is not going to be provided by consumer spending for perhaps up to ten years”.

Categories; Current UK Economy,