"Clearly, these high levels of spending have not been driven by rising wages. Instead, they’ve been driven by debt. 2017 was the first year since 1988 – the height of the Lawson boom – when consumers spent more than they earned. Levels of unsecured consumer debt – debt not backed up by collateral, like credit card borrowing – are now the highest they have ever been.
These rising debt levels follow the pre-crisis explosion in household debt, which peaked at 148 per cent of households’ disposable incomes in 2008. Since then, low wage growth has made many consumers unable to pay off the debts they accrued before 2008, whilst low interest rates have encouraged them to take on even more. Today, household debt stands at around 133 per cent households’ disposable incomes – roughly the same level as it was in 2005, in the midst of the pre-crisis bubble."