Eddie George Right To Be Concerned About Household Debt

10.07.00am UTC (GMT +0000) Wed 24th Mar 2004

Responding to comments made by Sir Eddie George this morning that he is 'concerned' about he levels of household debt, Dr Vincent Cable MP, Liberal Democrat Shadow Chancellor, said: "The Liberal Democrats have warned for a long time that the trillion pounds of household debt is a serious potential danger for the economy."

"Now it has been confirmed that not only individual members of the Monitory Policy Committee but the former Governor of the Bank of England himself share this concern."

"Hopefully they are right that a modest increase in interest rates will gently deflate the bubble in borrowing and the housing market but this is a high risk strategy. This also completely ignores the behaviour of certain lending institutions who are showing a reckless disregard for the sustainability of current levels of debt."

"What is required is a multi-pronged approach from the Bank of England, the Financial Services Authority and Government to reign in lending before the bubble bursts with potentially catastrophic consequences."