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Reckless lending leads to higher default rates. It is a simple enough principle, but the banks are having to learn it the hard way.
UK households are overloaded with debt. So it should not come as much of a surprise that more and more households are refusing to pay up. Credit cards and unsecured debts are being written off in ever larger amounts.
However, what do these huge write-offs do for banking sector profitability? Nothing good, that is for sure.
Bank of England Financial Stability Report