Puzzles in Today's Economy - the Build-Up of Household Debt
In his March 2004 speech at the Association of Corporate Treasurers' annual conference, Sir Andrew Large, Deputy Governor responsible for financial stability, considers the potential impact on monetary and financial stability of high levels of household debt. The speech assesses recent trends in household debt and the demand and supply factors that have contributed to them. Sir Andrew notes that while in extreme circumstances potential vulnerabilities stemming from higher debt levels could crystallise at some point and trigger a sharp demand slowdown, this is not the central case. In concluding, he explains that household debt is just one of many factors that are considered each month by the Monetary Policy Committee and that it is considered and weighed together with the whole gamut of demand and supply data