Osborne: Vigilance needed on household debt

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Media captionGeorge Osborne: "We do have a powerful new watchdog"

Chancellor George Osborne said authorities must be "vigilant" on household debt after families added £1tn of debt in the 10 years to 2007.

But, the value of "household assets are rising faster than household debts," Mr Osborne said.

He was answering questions from parliament's Treasury Select Committee.

Better mortgage regulation banning customers from getting mortgages without proving they can afford them should help, he said.

MP Mark Garnier was questioning Mr Osborne on whether the UK's economic recovery was too dependent on people borrowing and spending.

House prices will also need to be carefully monitored, said Mr Osborne.

"You should at least draw distinction between some of the phenomena you see in central London, which is caused by international money and the like coming into central London property as a form of investment, and what you see in most other places."

'Damaging impact'

He was also asked about last week's leak by the Financial Conduct Authority (FCA), which gave details of its business plan to a reporter at the Telegraph.

The leak caused steep falls in the price of insurance companies as the report suggested pensions and investment products would be investigated.

Mr Osborne promised an independent report into the issue.

"In the case of this instance someone at the FCA briefed a single news outlet on a policy" which had a "damaging impact," said Mr Osborne.

The report would be sent to the FCA's independent directors, he said.

Mr Osborne has written to the FCA's chairman, John Griffith-Jones, warning him that the FCA must answer several key questions in its inquiry.

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