UK debt management 'opposing recovery'
UK debt management 'opposing recovery'
- Monday, 1 June 2009Consumer debt management is preventing the long-term recovery of the economy, according to one analyst.
Michael Baxter, an economist at financial data provider Defaqto, explains that the state of
UK debt management efforts leads him to doubt the medium-term performance of the nation's finances.
This is in spite of indications that "the recession is no longer getting worse" following efforts by the Bank of England to ease monetary tightness.
In recent months, the base rate of interest has been cut to a historic low of 0.5 per cent, while the Bank has introduced more cash into the economy.
But it is consumer debt management that prevents Mr Baxter from seeing this as a sign of long-term optimism.
"Sure, the economy is going to pick up," he says.
"But I am more concerned about the outlook in the medium term."
Over such a time period, he notes that all aspects of
UK debt management - including personal debt and money owed by companies and the government - conspire to create a less positive outlook.

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