Wednesday 18th of November 2009
Bank of England policymaker Andrew Sentance has noted the renewed focus on debt management in light of the credit crunch.
Speaking at the University of London on Monday (November 16th), the Monetary Policy Committee (MPC) member explained that, "with the bursting of the credit bubble, household finances are now adjusting".
He added that UK households as a whole "moved significantly into deficit" during the mid-2000s as their total debt grew to around four per cent of the country’s national income.
Now, however, finances are entering positive territory once again as households focus on their debt management efforts.
Mr Sentance also spoke of more willingness to make large purchases, which could hamper any such efforts.
Both cars and houses are now considerable purchases for more Britons than in recent months, he claimed.
Mr Sentance serves as an external member of the MPC, providing an independent opinion on the level at which the base rate of interest should be set.
Written by Rachel Powell
