Double dip debt risk
25/08/2010Britons could find themselves needing more debt solutions in future, after a Bank of England adviser warned that it would be “foolish” to rule out the possibility of a double dip recession.
Martin Weale, who is a member of the Bank’s Monetary Policy Committee (MPC) claims that the current growth forecast for this year and next may be too optimistic.
Dr Weale told the Times that a rise in unemployment figures could happen as a result and declining house prices could lead to more people to fall into negative equity.
Debt levels amongst the public will in turn reduce consumer demand, although Dr Weale does agree that CPI inflation will return below 2 per cent in the next two years, which will come as a relief to debt-laden Britons.
Kevin Still, director of Atlantic Financial Management, says: "UK residents are probably already braced for more bad news on the economy. Those with disposable income are clearing debts and those that haven't are managing as best they can - with the ever present fear that interest rates will rise and create serious debt problems."
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