Rising unemployment could increase demand for debt consolidation advice

Tuesday 4th August 2009

Nearly four million Britons could soon find themselves out of work, with many likely to turn to debt management solutions as they attempt to juggle rising living costs without a regular wage.

According to the latest report into the immediate prospects for the UK economy published by the Centre for Economics and Business Research (CEBR), the UK is on the verge of suffering from a 'double dip' recession.

Not only would the government be forced to reduce public sector spending, but it is also be highly likely that ministers will increase taxes as they work to get the national debt under control over the next couple of years.

It added that unemployment could peak at around 3.8 million in the foreseeable future.

At its most pessimistic, the new CEBR report has predicted that national debt will carry on growing at a substantial rate over the coming years and could hit the £2.1 trillion mark by 2017, compared to the figure of £1.54 trillion recently projected by the Treasury.

However, the more optimistic prediction - that the chancellor is correct in believing national debt will start declining in relation to the UK GDP - relies largely on increased taxes, it suggested.

As a result of this, many people could find themselves falling further into the red and left with no choice but to seek out debt management solutions sooner rather than later.

These latest predictions come as Capital Economics has expressed its belief that UK banks will opt to "sit on" their money for the time being rather than expose themselves to the possibility of bad debt.

This would not only affect small businesses desperate for credit, but consumers and individual borrowers who are likely to suffer from a shortage of options for personal loans or credit cards.

News article brought to you by Debt1 – UK debt management specialists.

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