October 2012

It is pleasing to read that Ernst and Young are forecasting the UK economy will rebound in the second half of this year and grow by 1.2% next year buoyed by a housing market revival next spring.

There are "if's and but's" and much will depend on the extent to which consumers take opportunities to pay down their debts. This won't be helped by yet more price rises being passed onto them by their gas and electricity providers from November.

You asked us

"The Credit Action Debt Statistics were published on 3rd October. Any thoughts?" 

I have touched on these figures above. Whilst there are some encouraging signs, such as the total amount of credit card debt continues to fall and outstanding unsecured consumer credit was down £9bn at £156bn on the previous year, there are still causes for concern. 

Every 15 min 30 sec a property is repossessed and every 4 min 49 sec someone will be declared insolvent or bankrupt. 904,000 people had been unemployed for over a year between May and July 2012 and total outstanding personal debt stood at £1.412 trillion at the end of August which is up from £1.407 trillion last year. These are depressing figures. 

Clearly as a country we have some way to go to get out of this gloom and reach growth as suggested by Ernst and Young. There are still some tough times ahead.