Car debt adds horns to UK’s Brexit vulnerability

LONDON (Reuters Breakingviews) – Britain’s credit boom is a cause for concern. Not for the obvious reasons: rates are low and the banking sector is sturdy. The issue lies with another big UK industry – cars.

Auto finance is driving up the stock of non-mortgage debt, which includes credit cards and personal loans and hit 197 billion pounds at end-March. That’s close to the 2008 financial crisis peak, and household debt as a proportion of disposable income is rising. Since 2014, car finance has consistently been the biggest driver of annual consumer credit growth, which is now running at more than 10 percent.