Debt help: Caution shown concerning economic recovery

Professional debt help could be needed if the UK's economy slips back into recession.

Recent figures suggest that consumers are feeling less comfortable about the state of their own finances and those of the nation as a whole.

The British Retail Consortium-KMPG Retail Sales Monitor for July revealed that the strength of growth in retail is falling back.

UK retail sales values only rose by 0.5 per cent on a like-for-like basis from July 2009, when sales had increased by 1.8 per cent.

Stephen Robertson, director general at the BRC, commented: "The overriding factor is consumer confidence, it's fallen recently, though people are still more confident than this time last year.

"Talk of public spending cuts is unsettling customers and they are concentrating on essentials … It's clear the recovery continues to need support."

The comments come as the Nationwide Consumer Confidence Index fell for the third consecutive month in July, dropping back to a similar level seen in May 2009.

Consumers could benefit from seeking out professional debt advice in case the economy falls back into recession.

Kevin Still, director of Atlantic Financial Management, commented: "The consumer economy is still very fragile with millions of homeowners reliant on low interest rates or only paying interest on their mortgages.

"Cost of living is rising ahead of wage and salary rises, where many are frozen or have working hours reduced. Many of the government debt reduction initiatives don't hit until 2011.

"Consumers are wary of what they can't control and household budgets are being squeezed by factors outside of their control which can lead to expenditure shocks and debt problems."

Posted by Jim Mead

Categories; Current UK Economy,