Unsecured lending is growing at 5%, credit card by 4%, mortgage lending by 2%, which is enabling consumption to grow a lot faster than income.

Although good for short term nominal GDP growth it is going to be a real problem when interest rates increase.

For the recovery to be sustainable, real post tax incomes have to be growing by at least 1.5% yoy which requires at least 3% on wages and salaries. At the moment the UK economy is showing signs of 2004-2007, when nominal GDP growth was maintained by credit expansion, not wage growth.

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