Household debt casts long economic shadow: IMF

Housing busts and recessions are more severe and last for at least five years when they follow a big run-up in household debt, according to a study released on Tuesday by the International Monetary Fund. The findings suggest that economies of the United States, the UK and other European countries that saw consumer debt balloon along with house prices ahead of the onset of the financial crisis in 2007 may only just be starting to see the light at the end of the tunnel.
Weak consumer spending has been holding back a strong recovery in the United States. The UK has a similar problem and has been skirting a second recession, while several euro zone countries are confronting another downturn.