The rate at which UK institutions, households and businesses are borrowing money is greater than that of all other OECD countries.
This fact is alarming some economists not only because the rate of UK borrowing is high against the country’s GDP, but, as Statista’s Katharina Buchholz points out, it also because households, business and state coffers are running a deficit simultaneously for the first time since the 1980s.
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Yet, a lot of the of the money borrowed is going into the housing market that is currently booming in the UK, therefore potentially creating valuable assets for citizens in the future. The same is true for the state, with some economists claiming investment in the future to be more important than a positive net lending score, according to reporting by the Financial Times.
The opposite of this attitude can be observed in OECD countries like Germany, where the government is among those pursuing a radically different borrowing strategy aimed at reducing debt. The country with the lowest borrowing rate in the OECD was Ireland.
Not included in the data by the OECD are overseas investments by Britons as well as foreigners’ financial business in the UK. Here, another troublesome statistic emerges. While the UK had been running a net profit for overseas lending and borrowing in the past, the situation has reversed since the financial crisis.