The role of the Financial Policy Committee of the central bank is to monitor the risks to the UK economy, and the stability of the financial system.
However the Financial Conduct Authority (FCA) has previously warned about risks to the economy from consumer debt levels, and Alex Brazier, who is actually a member of the FPC, warned last July about rising debt levels.
But the FPC stated in a paper in September that “in domestic credit markets, risk-taking is currently judged to be at a standard level overall. Domestic credit has grown broadly in line with nominal GDP over the past two years.”
The central bank said: “This is not a material risk to economic growth, as consumer credit represents only 11 per cent of overall household debt. It is a risk to banks’ ability to withstand severe economic downturns, because this asset class is disproportionately more likely to default.”
