LONDON (Reuters) - Growth in British household debt is cause for a “little bit of concern”, Bank of England rate-setter Michael Saunders said on Tuesday.
In comments to MPs, he highlighted unsecured lending to consumers which has been rising at an annual pace of around 10 percent a year and a sharp rise in personal insolvencies over the last two years.
“Now I don’t think we’re yet at a point where the household sector is fragile like it was in 2006, 2007, but if you like, this is a movie that we’ve seen before in the UK,” Saunders said.
He said it was important that the Bank’s Financial Policy Committee continues to act to prevent a repeat of the build-up of household before the global financial crisis.
The Bank has said it does not believe there is a risky boom in lending to consumers, but it has called on banks to show they are taking measures to protect themselves against defaults.
Reporting by Andy Bruce and David Milliken; Editing by William Schomberg