posed by household debt and stagnant wages
Rising household debt and flatlining wages are becoming a major financial stability risk as Britain slows as a consequence of Brexit, the Organisation for Economic Co-operation and Development has said.
The warning from the Paris-based thinktank on Tuesday came as it argued Brexit uncertainty will result in Britain missing an upswing in global growth next year. The OECD forecasts UK growth will be the slowest among G7 nations next year, down from 1.5% this year to 1.2% in 2018 and 1.1% in 2019, when only Japan will grow at a slower rate.
The OECD warned that personal loans such as credit cards were at greater risk of default than mortgages if economic conditions worsened, as it called for tougher affordability checks to be introduced to stop banks from running into trouble. However, the Bank of England on Tuesday said Britain’s biggest high street banks could withstand the economic consequences of a disorderly brexit.
In its latest assessment of the global economy, the OECD found job creation in the UK was losing momentum, while consumer spending would remain subdued as higher inflation, pushed up by the depreciation of sterling after the Brexit vote, continued to hold back household purchasing power. While a weaker pound should help to increase exports, import growth is projected to fall as a consequence of weaker private consumption, it added.
“The major risk for the economy is the uncertainty surrounding the exit process from the European Union, which could hold back private spending more than projected,” its report found.
more
https://www.theguardian.com/politics/2017/nov/28/uk-missing-rising-global-growth-brexit-oecd
Rising household debt and flatlining wages are becoming a major financial stability risk as Britain slows as a consequence of Brexit, the Organisation for Economic Co-operation and Development has said.
The warning from the Paris-based thinktank on Tuesday came as it argued Brexit uncertainty will result in Britain missing an upswing in global growth next year. The OECD forecasts UK growth will be the slowest among G7 nations next year, down from 1.5% this year to 1.2% in 2018 and 1.1% in 2019, when only Japan will grow at a slower rate.
The OECD warned that personal loans such as credit cards were at greater risk of default than mortgages if economic conditions worsened, as it called for tougher affordability checks to be introduced to stop banks from running into trouble. However, the Bank of England on Tuesday said Britain’s biggest high street banks could withstand the economic consequences of a disorderly brexit.
In its latest assessment of the global economy, the OECD found job creation in the UK was losing momentum, while consumer spending would remain subdued as higher inflation, pushed up by the depreciation of sterling after the Brexit vote, continued to hold back household purchasing power. While a weaker pound should help to increase exports, import growth is projected to fall as a consequence of weaker private consumption, it added.
“The major risk for the economy is the uncertainty surrounding the exit process from the European Union, which could hold back private spending more than projected,” its report found.
more
https://www.theguardian.com/politics/2017/nov/28/uk-missing-rising-global-growth-brexit-oecd
