New data shows that, in the run-up to Christmas, household debt has increased at the fastest rate since the beginning of the recession.
At a time when people are trying to find money for a variety of festive expenses, the jobs market has become less secure and incomes have dropped at the fastest rate for 2 years.
That more people are getting into debt, and the average amount owed is rising, is hardly surprising in this context.
Tim Moore, senior economist at financial services information firm Markit, said: “December’s survey rounds off a year in which the aftershocks of the recession have hit UK household finances with unprecedented force. Weak labour market conditions, ongoing austerity measures and heightened inflationary pressures all contributed to a near-record deterioration of household finances in December.”
He added that it was likely things would deteriorate further before they improve.
The Bank of England has also published a report which indicates the majority of British households have experienced a squeeze on their finances over the last 12 months. This was presented as both a consequence of and a response to Government cuts.
Although the Centre for Economics and Business Research is forecasting a 1.7% drop in retail sales from November to December, the likes of John Lewis and Selfridges are reporting healthy year-on-year improvements.
If you wake up with a financial hangover in the New Year, our debt management experts might be able to help you find a cure. Get in touch to discuss your situation.