How did the UK become so indebted? In 2011, household, financial, and business debts stood at 420% of GDP in the UK.

This doesn't sound like a very good state of affairs (am I wrong?).

If this is a negative state of affairs how did the UK arrive at such a position? Presumably someone in a position of governance monitors the macroeconomic state at all times. 

If so, why was corrective action not taken at 200% (or whatever)?
A non-mainstream answer...

As Steve Keen is fond of pointing out, mainstream economists (incorrectly) think that the level of private debt has no macroeconomic effects so nobody was looking out for any unusual build up. 

Keep in mind the following two facts:


Most private debt is in fact loans from banks - in other words
demand deposits - which are money. So when private debt rises,
the money supply grows.
House prices are not properly reflected in standard measures of inflation.


In the years running up to the crash of 2007/8, central banks were monitoring the level of inflation and adjusting interest rates so as to keep inflation low. There was a housing bubble which meant that house prices were rising relative to the price of everything else (i.e. stuff recorded in inflation measures). The housing boom meant that private debt (i.e. the money supply) was rising at around ten percent a year whilst inflation was running at around only two or three percent. Almost no mainstream economists thought that this was dangerous.