UK household debt has not yet amplified Covid shock – BoE paper
But the share of households reporting financial difficulties is now rising, authors note
Countries with high levels of household debt tend to suffer deeper recessions, but this did not appear to be the case during the Covid-19 shock in the UK, research by the Bank of England has found.
In a quarterly bulletin article, published today (June 25), Jeremy Franklin et al examine survey data on the effects of debt during the Covid-19 shock. Historically, household debt has tended to amplify shocks by adding pressure to household finances, causing a deeper drop in consumption.
The Covid
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