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A matter of facts

An unsustainable credit boom? Actually, no

Since the turn of the century, we have had a dramatic boom based on huge increases in household debt. It was unsustainable and we are now being punished for our greed. So says the received wisdom.

It is always a good idea, when confronted with received wisdom, to look at the facts. Here are one or two interesting ones. From 2001 to 2007, household debt in Britain rose from £811bn to £1,533bn. A less well-known fact is that holdings of financial assets by British households rose from £2,929bn in 2001 to £4,043bn in 2007. So while household debt rose by…

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