Personal debt levels ‘to damage economy’
The level of personal debt in the UK is likely to result in a weaker national economy in the near future, it has been warned.
F&C UK Growth & Income Fund manager Ted Scott makes the claims in light of a ten per cent fall in the All Shares Index since mid-July.
“The consumer, pumped up on cheap credit, has kept the economy ticking,” he suggests.
“But given the record levels of indebtedness, consumers will now wish to rebuild their savings, particularly if unemployment starts to rise.”
He adds that company profits are also likely to be hit as personal debt is reined in, as consumers contribute about 70 per cent to the UK’s gross domestic product each year.
Investment firm Edward Jones advises Britons to take a long-term approach to their finances in order to ride out periods of weaker economic activity.
With the current strength of the pound, now is identified as a good time to establish greater monetary security.
Those looking to do so by eliminating their personal debt could benefit from expert advice.
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