Carney fear for personal debts

Soaring household debt poses a “major” risk to the banking sector, experts have warned.

Respected think tank the Organisation for Economic Cooperation and Development has called for tougher limits to be slapped on how much people can borrow relative to their incomes.

Its concerns were echoed by the Bank of England which said household indebtedness was one of the biggest threats to financial stability after Brexit.

Record low interest rates since the financial crisis of 2008 have fuelled a borrowing boom.

But the OECD warned: “High consumer debt growth, coupled with stagnant household incomes, is a major financial stability risk.”

Bank of England Governor Mark Carney repeated his concerns about “pockets of risk” from ballooning consumer credit.

But he says banks are well prepared for the possible threat of a “disorderly Brexit” taking place when the UK leaves the EU in 2019.

The Bank says lenders have built up funds to withstand a big shock, such as the UK leaving the EU without a trade deal in place.

However, it said there could be implications for the wider economy.

Fears of a slowdown came as the OECD cut its growth forecasts to just 1.2% next year and 1.1% for 2018/19.

CONCERNS Mark Carney