The synchronised nature of the global economic recovery has fanned speculation that the post-crisis deleveraging in developed countries has finally come to an end. However, we err on the side of caution and cite evidence from the UK, which suggests there has been limited progress on balance sheet repair. In the aftermath of a financial crisis the sharp reduction in central bank policy rates lowers the servicing burden of private sector debts and allows borrowers to swiftly reduce leverage. In the UK, monetary easing has instead triggered a mini-consumer boom at the expense of debt reduction. Of the 75% point increase ... (full story)