Debt management boost from deflation
Debt management boost from deflation
- Friday, 22 May 2009Deflation could help many Britons to manage debts more carefully in the coming months.
Charles Davis, economist at the Centre for Economics and Business Research, explains that consumers may not choose to spend more as the cost of living falls.
Instead, he suggests that some funds could be put towards other areas - which may include debt management for many families.
"The cost of living is starting to drop back which will be a bit of a boon to consumers," he says.
But he adds: "That's not to say that that will necessarily translate into increased spending."
He argues that rising unemployment and consumer doubt about the future of the economy could be among the factors suppressing spending.
Individuals with concerns about such issues could look to manage debts using any extra money they find they have coming in.
With inflation on the retail prices index standing at -1.2 per cent in April, debt management efforts could be boosted by the falling cost of living.

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