Debt management could be needed following bleak economic forecast
Debt management could be needed following bleak economic forecast
- Wednesday, 3 February 2010People may need to engage in
debt management plans, following more gloomy forecasts for UK households despite the end of the recession.
The National Institute of Economic and Social Research (NIESR) has warned of a squeeze on disposable income, rising unemployment and a fall in house prices.
The think tank predicts that disposable income growth would be depressed to 1.3 per cent in 2010, and less than one percent in 2011, reports the Telegraph. This is compared to growth of almost four per cent in 2009.
Unemployment is expected to rise again, with NIESR forecasting the jobless rate to hit 2.9 million next year, rising from 7.8 per cent to nine per cent of the labour force.
The organisation told the Telegraph that it was likely that unemployment "has just paused and will revert back to an upward trend this year".
Households will also be hit by rising inflation, with latest data from the Office for National Statistics (ONS) revealing that the Consumer Price Index (CPI) measure of inflation increased to 2.9 per cent in December, up from 1.9 per cent the previous month.
It is the largest ever increase in the annual rate between two months.

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