March 15 2010

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Credit crunch woes

In the week leading up to Christmas Tv advertisements for many of the big high street shops in the UK have shamelessly promoted January price reductions which start on Boxing Day. In an unseasonal bid to bolster record low retail sales figures-a key indicator of economic downturn-and stave off the sort of demise experienced by old-time family favourite store Woolworths, the cash-strapped public have been encouraged to spend, spend, spend.

Personal debt in the UK is higher than the income generated by the country as a whole for the second year running, research shows.

The total amount owed by consumers through mortgages, loans and credit cards rose by 7.3% during the year to the end of June to stand at £1.444 trillion, according to accountants Grant Thornton.

But during the same period gross domestic product (GDP) rose by only 5.1% in nominal terms to £1.41 trillion. During the past 10 years, the number of people declared insolvent has risen from an average of 24,000 a year in 1997 to more than 100,000 a year in both 2006 and 2007.

The latest figures show that 49,607 people have been declared insolvent during the first six months of this year, and Grant Thorton is predicting the total number for 2008 could be more 100,000 and close to 120,000.

In his Christmas Day sermon, the Bishop of Manchester, the Right Reverend Nigel McCulloch has attacked the UK government for "scandalously encouraging" people to go into debit.

He says society is facing an inevitable come-uppance for its "buy now, pay later" culture and adds that the "collapse of the god of materialism" is forcing society to think again.

"We are being shocked this Christmas into seeing that there are more important values to own and cherish."

Who do you blame for the current economic crisis in the UK? The-Latest wants to hear from you.

In the meantime enjoy this Credit crunch song by AntanDebt:

submitted by contribs editor on December 25th 2008

Debate

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