Osborne worried by high levels of household debt

Speaking at the Treasury Select Committee chancellor George Osborne said that high household debt was one of the key issues in the build up to the financial crisis. He noted that there is a striking chart of private sector debt over last 20 years in the red book with a spike from 2006 onwards:

Osborne remarked that the better news is that debt is down by 14 per cent of GDP since its peak in the first quarter of 2010 and that this is evidence that the deleveraging process is taking place. The chancellor said that it was not ideal that households are so overextended as this results in consumption not being as high as hoped, though consumption last year was stronger than forecast. He said that he agreed in overall analysis that this is another big challenge facing the UK.