The number of people in England and Wales filing for insolvency hit a more than six-year high in the second quarter, adding to conflicting economic signals for Bank of England officials as they consider whether to raise interest rates next week. Seasonally adjusted data from the Insolvency Service showed 28,951 people registered as insolvent between April and June - up 27 percent on a year ago and the largest total since early 2012 when Britain last flirted with recession.
There are questions about the long-term financial health of British consumers who have been squeezed by high inflation caused by the pound's sharp fall after the 2016 Brexit vote.
On Thursday, the Office for National Statistics said households' outgoings surpassed their income last year for the first time since 1988, raising concerns about debt problems among many consumers.
Most economists polled by Reuters think the BoE will raise rates to a new post-financial crisis high of 0.75 percent next Thursday. The central bank believes inflation pressure is beginning to firm and that a slowdown in the economy in early 2018 was caused mostly by cold winter weather.
But wage growth has failed to pick up much and some economists are concerned that domestically generated inflation pressure is actually weakening, which would mean a rate hike would be unnecessary and even detrimental to households.
Comments
Comments are closed.