The corporate sector’s loan-to-GDP ratio increased by 29 percentage points in the ten years before the bubble burst in 1991. In the United States, it was the household sector that leveraged, especially in housing.
This is partly in response to slower consumer demand, but the dramatic change of view about international conditions and the general uncertainty reflected in financial market prices are surely playing a major role. So in the period ahead, private demand could look weaker than it has for some years.