UK Only Article:
The reluctant European
An economy renowned for sobriety has binged on debt
WHEN Lehman Brothers collapsed in 2008 and the world economy entered its worst slump since the Great Depression, Canada stood out as a haven of tranquillity. Its economy contracted along with those of other rich countries. But Canadian borrowers and banks had not indulged in the subprime follies of the United States and parts of Europe. Its recession was milder and its recovery stronger, partly thanks to higher oil prices. Canada performed so well that Britain poached its central-bank governor, Mark Carney, to run the Bank of England.
Now there is reason to wonder whether Canada, rather than holding back from the revels, just showed up late. With encouragement from ultra-low interest rates, Canadian consumers are on a borrowing spree. Consumer debt is a record 165% of disposable income (see chart). Most of that …
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