Monday, 1 October 2012

UK Sectoral Balances and Private Debt Levels - Q2 2012

Q2 2012 Figures are out. Apologies for the delay in getting these up - it's been a busy week at Wilson Towers.

The figures are skewed this quarter due to the nationalisation of the 'Post Office Pension Fund'. This has been a massive £28bn transfer from the financial sector to the government sector. What it does show though is that it is possible to 'pay off' the national debt by nationalising pension funds (which are mostly Gilts anyway) switching them from an 'invested' basis to a 'pay as you go' basis.

Given that pensions are always a current production distribution problem, you have to wonder which genius thought that offsetting the 'paradox of thrift' for several decades was a good design for a pension system in the first place.

The five sector chart shows the pension transfer much more clearly.

And finally the private debt levels:

Households continue to deleverage very slowly, but private non-financials are still gearing up again.

Source: Office of National Statistics, tables RPZD, RPYN, RQAW, RPZT, RQCH, DJDS (Seasonally adjusted Net Lending/Borrowing per sector plus residual error) and YBHA (Gross domestic product at market prices, seasonally adjusted). Private sector debt based on tables J8XI, NLBC, NKZA, NNQC, NNRE, NNXI, NNXM, NNWK, J8XK, NLSY, NLUA, J8XM, NJCS, and NJBQ (Lending, securites and derivatives per sector, not seasonally adjusted) scaled by BKTL (Gross domestic product at market prices, not seasonally adjusted).