The Financial Position of British Households: Evidence from the 2018 NMG Consulting Survey

13 Pages Posted: 4 Jan 2019

See all articles by Lisa Panigrahi

Lisa Panigrahi

Bank of England

Harry Rigg

Bank of England

Emma Rockall

Bank of England

Date Written: December 21, 2018

Abstract

Households’ expectations for their future income and spending growth held up in the latest survey (conducted between 5 and 26 September) with expectations for the wider economy remaining subdued.

The size of the tail of highly indebted households has fallen slightly over the past year — somewhat reversing the gradual deterioration observed since its post-crisis trough. By contrast, subjective self-reported metrics of household vulnerability showed a small increase.

The 25 basis point increase in Bank Rate to 0.75%, announced in August 2018, has already been passed through to higher interest rates for the majority of mortgagors on floating rates. The impact on borrower resilience and the availability of credit appears limited.

One way higher interest rates affect households is through the higher interest they pay (receive) on the debt (assets) they hold. New estimates suggest a 1 percentage point increase in Bank Rate could reduce consumption by 0.2% through this channel, a smaller effect than previously estimated.

Suggested Citation

Panigrahi, Lisa and Rigg, Harry and Rockall, Emma, The Financial Position of British Households: Evidence from the 2018 NMG Consulting Survey (December 21, 2018). Bank of England Quarterly Bulletin 2018 Q4. Available at SSRN: https://ssrn.com/abstract=3310119

Lisa Panigrahi (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Harry Rigg

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Emma Rockall

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
2
Abstract Views
24
PlumX Metrics
!

Under construction: SSRN citations while be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information