Recession is over - but debt problems are not

After six consecutive quarters of economic decline, it was announced yesterday that the UK is finally out of recession.

Figures from the Office for National Statistics (ONS) showed that the economy grew in the final quarter of 2009, though by a mere 0.1 per cent – less than many economists had expected.

Analysts were almost unanimous in their belief that any recovery will be protracted, and that the effects will be felt on beleaguered British households for years to come.

Indeed, research from PayPal found that Brits are likely to remain cautious with their spending for some time, as unemployment and debt problems continue to rise.

However, one positive aspect of the downturn appears to be a change in public attitudes toward debt.

According to the survey, more than one in six are saving for desired objects, rather than using a credit card as they would have previously.

Kevin Still, director of Atlantic, said that "the lower-than-expected expansion figures show just how precarious the economy is".

"The tail of the recession will create a debt backlash," he said, "with personal insolvencies and serious debt problems continuing to put a huge strain on the whole money and debt advice sector."

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