BOE’s Cunliffe Says Low Rates Raise Risk of Debt Buildup

Bank of England Deputy Governor Jon Cunliffe said low borrowing costs may hide the real cost of Britons’ mortgage burden and increase the risk of a buildup in household debt that could threaten financial stability.

“The main risk we see arising from the housing market is the risk that house prices continue to grow strongly and faster than earnings” and this “leads to higher and more concentrated household indebtedness,” Cunliffe said in a speech today in Liverpool, England. “This risk is greater at a time of exceptionally low interest rates which may well mask the likely true cost of a mortgage over time.”