Blog
Unit 2 Macro: Zombie Households and the Slow Recovery
18th January 2013
Is the UK economy being held back by 'zombie' households lumbered with too much debt to go out and spend? This short Financial Times discussion video considers aspects such as the real value of property and the total level of household debt. The video tackles measures of inequality including a chart showing the gini coefficient (a broad measure of inequality) and the share of household income going to the top 1% (a narrow measure of inequality). Inequality matters for lots of economic, social and political reasons but one is the divergent savings behaviour between households. The poorest households in the UK have in recent years borrowed more and more creating a big personal debt problem - often debt provided at very high interest rates from payday loans companies and the like. Plus lending to lower income households looking to buy property but with a high risk of problems in repaying debt.
Related issue
Payday loans in London (BBC news)
Payday loans businesses warned over their practices
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.