A new warning has been issued about the growing risk of a “debt trap” if interest rates around the world stay near zero, which has encouraged borrowing by households, businesses and governments. He noted that since the financial crisis of 2007-08, global debt levels in relation to GDP had continued to go up, raising financial stability risks. “Debt service ratios are only so low because interest rates have been falling so much,” Borio said. The BIS has ranked the UK among the most vulnerable countries in terms of households’ debt service burdens, especially if interest rates were to be raised rapidly. It would be the first increase in interest rates since July 2007,.

Source: The Guardian September 17, 2017 16:00 UTC