Tag Archives: Debt

Consumer spending to remain weak despite reduced debt risk

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Consumer spending to remain weak despite reduced debt riskA new report from Alliance Trust has suggested that consumer spending may remain weak in the coming months, despite improving financial situations amongst consumers.

In the second quarter of 2009, Alliance Trust`s Financial Reality Index – an ongoing measure of consumers` financial wellbeing – showed an improvement for the second quarter in a row, taking the Index to its highest level since the first quarter of 2008.

But Shona Dobbie, Head of Alliance Trust Research, warned that although conditions are starting to ease, consumers remain under “significant pressure” and are likely to rein in spending as a result. Continue reading →

Inflation drops further

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According to The Telegraph, `Britain is now deeply in deflationary territory`; inflation has seen its biggest drop since records began in 1948.

In particular, RPI (Retail Prices Index) annual inflation stood at minus 1.6% in June.

A debt expert for Think Money commented: “Although some people may welcome falling prices, it is important to be aware of the implications.

“On a national level, deflation is bad for the economy. When people know that prices are dropping, they`re always tempted to put off spending money until `tomorrow`. This means businesses make less money, and that`s clearly bad for their employees.

“Plus, at a time like now, some people may suffer because their annual pay rise is based on RPI. For people with debts that are continuing to grow, it may become increasingly difficult to stay on top of their finances. We would advise anyone in this situation to contact a professional debt adviser without delay.”