I've been slightly disturbed by the relatively negative coverage of one of the main economic stories of today - the fall in net personal debt in the UK. Given that personal debt in the UK totals £1.457 tn - that's 1,457,000,000,000, almost £25,000 for every man, woman and child in the UK - a slight fall in this level could be good news.
One of the major reasons for the Credit Crunch was reckless banks encouraging people to borrow beyond their means - and we're now seeing the consequences in higher levels of bankruptcy and the growth in mortgage reposessions. If there isn't quite so much high risk lending going on plunging people into a spiral of debt - that, in my view, is progress.
We need to get the market for mortgages moving again - but this has to be on a more sustainable basis - sustainable borrowing, spending and saving will in the long run yield a better financial position for all. So lets not bemoan a return to more sensible lending, and work to improve the banking system for all ensuring competitively priced mortgages being offered at or around 3 times salary.
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