Households look to get debt under control

The average household debt to income ratio fell sharply in the December quarter from 160 per cent to 156 per cent as people paid down their cards and loans.

Merrill Lynch economist Peter Osbourne said that the debt to income ratio would need to fall further to about 140 per cent before there would be a significant pick up in borrowing and spending. "The ratio needs to fall significantly over the next two to three years to return household balance sheets to a healthy state."

Source: The Australian Financial Review