Newspaper article The Evening Standard (London, England)

PS34 Billion Brexit Borrowing Binge; FAMILIES FORCED TO USE SAVINGS OR LOANS TO MAINTAIN LIFESTYLES AFTER SLUMP IN POUND Economy 'Heading for Messy Day of Reckoning'

Newspaper article The Evening Standard (London, England)

PS34 Billion Brexit Borrowing Binge; FAMILIES FORCED TO USE SAVINGS OR LOANS TO MAINTAIN LIFESTYLES AFTER SLUMP IN POUND Economy 'Heading for Messy Day of Reckoning'

Article excerpt

Byline: Nicholas Cecil and Joe Murphy

FAMILIES have been on a PS34 billion borrowing binge to maintain their lifestyles since the Brexit vote, official figures reveal today.

Traditionally, households have been "net lenders" to the economy, but there was a dramatic turnaround in this trend shortly after the June 2016 referendum.

From autumn that year households became "net borrowers", meaning they had to take out loans or draw on their savings to fund their spending and investments.

Figures from the Office for National Statistics show this has now happened for the sixth consecutive quarter.

The pound slumped in value after the Brexit vote, pushing up prices in shops, for holidays and other spending. Andrew Wishart, UK economist at Capital Economics, said: "Rather than cutting back on expenditure, households have reduced their savings or increased their borrowing to try to maintain their living standards." Dr Howard Archer, chief economic adviser at EY ITEM Club, said the borrowing was caused by a mixture of the devaluation pushing up inflation and a long squeeze on Continued on Page 4 Continued from Page 1 incomes. Much of the borrowing was by the middle classes maintaining their lifestyles while loans were cheap, rather than families on the breadline. …

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