Merrill says household borrowing will remain buoyant

Merrill Lynch, Mortgages PLCs new parent, says household sector borrowing in the UK is not about to collapse.

A Merrill Lynch research report published this morning says: “In the UK the question is whether household sector borrowing is about to collapse or moderate towards a steady growth rate. Our view remains that household sector borrowing will not collapse since interest rates remain low and the employment and income outlook is benign.

“In equity strategy we have a neutral rating on the UK, based on the view that, while the housing market and mortgage borrowing is slowing, consumer spending should be resilient.”