By Matt Waldron and Garry Young of the Bank's Monetary Assessment and Strategy Division.
This article summarises the key results from the latest survey carried out for the Bank by NMG Research about the state of household finances. There was little change in the proportion of households who reported problems with their unsecured debt, although there was a small increase in the proportion of mortgagors having difficulty paying for their mortgage. The share of overall income accounted for by households reporting either type of problem was relatively small, suggesting that any impact on aggregate consumer spending is likely to have been muted. The most common explanations given for debt problems were temporary cash-flow shortfalls and overspending; the most popular way of resolving these issues was to cut back spending. Very few households said they considered bankruptcy a solution to their debt problems.
The state of British household finances: results from the 2006 NMG Research survey