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Time to change the way we think about household debt—it is not always a problem

The Institute for Fiscal Studies says that a large chunk of the £200bn debt held by UK households is manageable

By Andrew Hood  

Recent years have seen growing concern about the amount of unsecured debt held by UK households. On the Bank of England’s measure households now hold a total of over £200bn of this kind of debt—things like credit card debt, unsecured loans from banks, and car finance debt. Of course the total volume of the unsecured debt for households might have important implications for financial stability, as the Bank of England itself has noted. But knowing the total amount of household debt in the UK tells you very little about whether…

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