It’s not just corporate debt that is worrying market watchers. Bloomberg News reports that a “global consumer default wave” is under way too. The trend is most apparent in China, where an estimated eight million people lost their jobs in February. Overdue credit-card debt is up 50% last month on a year earlier. “Few places have seen a bigger jump in consumer borrowing in recent years than China,” where a housing boom and new online lending platforms drove household debt to a record 55% of GDP last year.
The Institute of International Finance says that globally households are carrying $12trn more debt than before the 2008 crisis. European households are particularly vulnerable. Household debt as a percentage of net disposable income sits at more than 200% in Denmark, the Netherlands and Norway. British household debt sits at 141% on this measure, while American households, which have deleveraged in the years since the great recession, score a comparatively sober 105%.
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