Congratulations (of sorts) go to the UK as British household debt is highest in history.



British households are now more indebted than those of any other major country in recorded history, it has emerged.



Families in the UK now owe a record 173pc of their incomes in debts, official figures have shown. The ratio of debt to income is higher than any other country in the Group of Seven leading industrialised economies, and is sharply higher than the 129pc of incomes it was five years ago.



Michael Saunders of Citigroup warned that - at 173pc of household incomes - the debt burden is higher even than Japan's when it peaked in 1990, before more than a decade of deflation. Philip Shaw of Investec said: "Although we take the view that the economy will avoid a recession , our confidence is ebbing."

Avoid A Recession?

Barclays Warns Of Financial Storm

Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero".



"We're in a nasty environment," said Tim Bond, the bank's chief equity strategist. "There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth."



Barclays Capital said in its closely-watched Global Outlook that US headline inflation would hit 5.5pc by August and the Fed will have to raise interest rates six times by the end of next year to prevent a wage-spiral. If it hesitates, the bond markets will take matters into their own hands. "This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that's possible. It has lost all credibility," said Mr Bond.

No Wage Price Spiral

This is not Bizarro World, nor it is 1970.

Fed Has Lost Credibility

Crack-Up Boom In Asia

$SSEC Weekly Chart

Who's In Control?

Implications of Peak Credit

get religion

Deflation Has Set In

Can The Fed Print Its Way Out?

What About A Crack-Up Boom?

had

credit boom

What About Congress?

Attitudes Lead The Way

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