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OPINION

Charts of the week: 25 July 2014

Charts of the week: 25 July 2014
July 25, 2014
Charts of the week: 25 July 2014

London Life

This chart, which illustrates how property prices in the capital have outstripped the rest of the country in recent years, will come as no surprise to most. But the second chart illustrates one of the key arguments for why London property will continue to outstrip the regions – population growth – with London forecast to grow by almost 13 per cent between 2012 and 2022, around 50 per cent more than the next fastest growing region.

Borrowing blues?

Sticking with the housing market for now, the latest figures from the British Banking Association this week showed that the number of mortgages approved for house purchases ticked upwards in June, after four months of consecutive declines. This suggests that the dampening effect of the Mortgage Market Review may be beginning to wear off.

Source: British Banking Association

Another interesting element from the British Banking Association’s monthly survey showed that while consumers are using their credit cards less, the number turning to loans and overdrafts has ticked up quite markedly in the past six months. Indeed loans and overdrafts have returned to annual growth this year, for the first time in several years.

Source: British Banking Association

This is corroborated by a third chart from the BBA survey which shows overall unsecured borrowing continuing to grow, up by 1.3 per cent over the past 12 months within which credit card borrowing has dipped to 1.8 per cent growth while loans and overdrafts are up by 0.9 per cent. Personal deposits have fallen back gradually but seem to have settled and are currently up 3.6 per cent year on year.

Source: British Banking Association

China Crisis?

The rapid pace of growth in credit in China is laid bare by this chart from Standard Chartered’s respected economist Stephen Green. It shows that China’s aggregate debt has expanded rapidly over the past four years to reach a point where it is equivalent to 251 per cent of Chinese GDP. While this is by no means the highest ratio in the world, indeed the US has a debt to GDP ratio of around 260 per cent, but the speed of its accrual is what is most notable.