{"id":19427,"date":"2017-11-25T15:29:21","date_gmt":"2017-11-25T15:29:21","guid":{"rendered":"https:\/\/dominiclevent.com\/blog\/?p=19427"},"modified":"2019-04-17T17:16:06","modified_gmt":"2019-04-17T17:16:06","slug":"u-k-litigation-cases-on-defaulted-consumer-debts-soar-beyond-2008-levels","status":"publish","type":"post","link":"https:\/\/dominiclevent.com\/blog\/u-k-litigation-cases-on-defaulted-consumer-debts-soar-beyond-2008-levels\/","title":{"rendered":"U.K. Litigation Cases On Defaulted Consumer Debts Soar Beyond 2008 Levels"},"content":{"rendered":"


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Last month, S&P warned that UK lenders could incur \u00a330 billion of losses on their consumer lending portfolios consisting of credit cards, personal and auto loans if interest rates and unemployment rose sharply.Much like in the U.S., S&P warned that\u00a0“loose monetary policy, cheap central bank term funding schemes and benign economic conditions” had fueled an “unsustainable” yet massive expansion of consumer credit that will inevitably end badly.<\/strong>Per\u00a0The Guardian<\/a>:<\/p>\n

<\/p>\n

The rapid rise in UK consumer debt to \u00a3200bn from car finance, personal loans and credit cards is unsustainable at current growth rates and should raise \u201cred flags\u201d for the major lenders,<\/strong>\u00a0ratings agency Standard & Poor\u2019s has warned.<\/p>\n


\n <\/p>\n

In detailed analysis of the sector, S&P warned that losses from this form of lending suffered by banks and other financial institutions could be \u201csharp and very sudden\u201d in an economic downturn and may be exacerbated if the Bank of England increased interest rates.<\/p>\n


\n <\/p>\n

It also warned that it could downgrade banks\u2019 credit ratings if the high growth rate persisted or banks took on too much risk in this sector. But it did not fear any system-wide impact from consumer credit.<\/p>\n


\n <\/p>\n

\u201cLoose monetary policy, cheap central bank term funding schemes and benign economic conditions have supported consumer credit supply and demand,\u201d\u00a0<\/strong>S&P said.<\/p>\n


\n <\/p>\n

Annual growth rates in UK consumer credit of 10% a year have outpaced household income growth, which is closer to 2%, and become a focus for the Bank which is scrutinising lenders\u2019 approach to the sector.<\/p>\n


\n <\/p>\n

\u201cWe believe the double-digit annual growth rate in UK consumer credit would be unsustainable if it continued at the same pace,\u201d<\/strong>\u00a0S&P said.<\/p>\n

\n<\/p><\/blockquote>\n

\"Credit<\/p>\n

Now, new data surrounding the growing number of court filings related to the recovery of consumer debts highlights just how serious the personal leverage problem has become in the UK. As the\u00a0FT<\/a>\u00a0points out this morning, there have been over 900,000 court judgements on consumer debts in just the first 9 months of 2017, up 34% compared to the same period in 2016, compared to only 827,000 at the height of the great recession in 2008.<\/p>\n<\/p><\/div>\n

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Disclosure:\u00a0Copyright \u00a92009-2017 ZeroHedge.com\/ABC Media, LTD; All Rights Reserved. Zero Hedge is intended for Mature Audiences. Familiarize yourself with our legal and use policies every …<\/p>\n


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Last month, S&P warned that UK lenders could incur \u00a330 billion of losses on their consumer lending portfolios consisting of credit cards, personal and auto loans if interest rates and unemployment rose sharply.Much like in the U.S., S&P warned that\u00a0“loose monetary policy, cheap central bank term funding schemes and benign economic conditions” had fueled an … <\/p>\n

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