UK household debt has not yet amplified Covid shock – BoE paper

Bank of England
Photo: Juno Snowdon Photography

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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