Friday, 27 June 2014

UK Sectoral Balances and Private Debt Levels - Q1 2014

Fairly stable structure here now that has been about the same for a couple of years - similar in shape to the 2002 to 2008 period.
The household sector is borrowing more and the non-financial sector continues to save. But so far the household sector really hasn't got into party mood and gone bonkers.

And the private debt levels:
The big news here is the continuing relative deleveraging of the non-financial sector. Businesses are paying back debt faster than they are taking it out and this is reflected in the sector lending by the reduction in net-lending to other sectors. Credit acceleration is now deeply negative and unless that changes it points to a pull back at some point.

Q2 preliminary data is mixed and confusing. Once again we'll only know when all the results are in. And we have to wait until September for that.

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).

2 comments:

Simon Reynolds said...

Neil,

Your blog is always interesting.

One point I'm not clear about re these debt figures. Do they exclude double counting? Say Company A borrows £1m from Company B at 5% interest, and then Company B borrows £1m from Company A at 5%. Does that mean total debt has increased by £2m or £0m.

Cheers

Simon

Neil Wilson said...

The net figures at the top net off the assets and liabilities within each sector.

So in if two companies lend to each other those transactions will disappear within the 'Non-Financial Company' and 'Domestic Private Sector' Aggregates.

The debt figures at the bottom relate to the balance sheet totals. So in that case the 'Non-financal company' total will be increased by £2m, but presumably so will GDP.