Households now seem to have entered a period of greater financial caution, and this may act as a restraining influence on the growth of household spending for a while to come. The second issue is the high average growth rate of household credit over an extended period. This is a longer-run issue and one on which it is more difficult to make firm judgments.
For more than a decade, household indebtedness has grown at a rate well in excess of the growth in household incomes. This has meant that the aggregate ratio of household debt to household income has trended upwards, as has the proportion of household income required to service the debt, and the gearing ratio (debt to value of household assets).