The OBR’s forecast relies on households saving less so they can keep spending, but with little in the bank, most will have to borrow instead. Our measure of household debt burdens shows that this leaves households little to spare. Plausible shocks could push debt stress back to the levels seen before the financial crisis.

The FCA’s affordability rules have been in force since 2018. So why are lenders still lending to households who can’t afford the essentials?

‘Financial inclusion’ should help people withstand financial shocks, not deepen them. Yet the current agenda focuses overwhelmingly on increasing access to credit per se, rather than on credit that people can genuinely afford.

In recent weeks, Ministers have set out new measures to help people struggling with the cost of living – including free bus travel for children and targeted reductions in food tariffs. But the Financial Services and Markets Bill that has recently been laid before Parliament points in a very different, and concerning, direction. Clause 8 of the Bill would upend vital protections for borrowers, and we call for it to be scrapped.

Next week’s Budget will take place in the context of an urgent need to boost economic growth. If we are serious about this, we need to tackle household debt and restore the safety net.

New CfRC research indicates that some lower-income borrowers are highly sensitive to their credit scores, and this could be negatively impacting their financial behaviours: causing them to prioritise credit repayments over the payment of household bills and other essentials. People in financial difficulty may also be receiving inappropriate messages that encourage them to take on more credit than they can afford.

Calls for deregulation are ignoring the lessons of the past. In this blog we draw on our recent response to the FCA and FOS joint call for input concerning 'mass redress' events to highlight how a lack of clear rules and (de)regulatory 'sludge' combine to cause widespread consumer harm. We need better regulation not deregulation to support 'growth without consumer exploitation'.

Our recent analysis of the Debt Need Survey provides important new evidence about the drivers of illegal lending. Contrary to recent reports of a 'credit vacuum' arising from regulatory interventions, we find most users of illegal lenders are 'maxed out' on legal credit. The underlying problem is poverty, which credit markets cannot be expected to address.