ts to revive the mortgage market after the banking crisis in 2008 with its Help to Buy scheme. This scheme boosted house sales since it subsidized the deposits of first time buyers. Another benefit this scheme enabled is supporting a Bank of England project by offering low mortgage rates to buyers and re-mortgagers to support lenders. The fear is that most of the mortgage borrowers have never seen an increase in interest rates and if in such a case when the rates rise, they would be unable to cope with the debt. Student debt on the other hand has rocketed in the last few years due to broad changes regarding how the universities are funded. Central government provided the majority of the funding for UK universities until 2013. University fees first rose to £9,000 and then £9,250 this year. This has increased the burden on students who borrow from the Student Loan Company(SLC). March figures show outstanding debt on loans jumped by 16.6% to £100.5bn, up from £86.2bn a year earlier. (Inman and Barr, 2018) Low wages growth, rising taxes and the shift to insecure working practices are all elements that will likely make it more difficult for students to repay their loans in the future.

UK has a large trade deficit which demonstrates that citizens are spending more than they earn, thus preferring imported goods and borrowing from foreigners. While UK government experiences a downfall in government spending, corporations are rich in cash and operates with healthy balance sheets. Although British citizens suffered from low growth in wages in the recent years, they were able to extend their spending via credit due to low interest rates. Another issue rising from low interest rates might be the acceleration of household debt which would harm the financial stability of UK. The problem is that if a recession hits and incomes decline or interest rates rise consumers will be in trouble. Policies need to carefully balance minimizing the risks of growth in household credit for financial stability without harming the potential long-term benefits of development.