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Is UK Economy Recovering?

Written By On 08/02/2014

Last year's level of unsecured debt in the UK stood at £158.2 billion according to the Bank of England. They recorded that it rose by 4.9 per cent on the previous year.

But, it was still quite a way down from the highs of £208.3 billion back in 2008.

Now moneysupermarket.com have done their own research on unsecured debt and their findings are quite concerning.

They believe that two out of every three adults in Britain are using some sort of unsecured loan. Some examples of these are bank overdrafts, credit cards, short term loans and payday loans.

The price comparison website revealed that out of the two thousand people that they surveyed, twenty per cent said they were loaning money by having at least two forms of unsecured borrowing, whilst nearly ten per cent owned up to having at least three.

Moneysupermarket say that their data equates to an unsecured debt for an average UK adult amounts to £4,412, not including any type of mortgage loan.

They make the observation that younger adults between the ages of 18 to 24 tend to borrow even more as their average debt is £5,446.

However, they add that approximately five hundred surveyed felt they were heading in the right direction because they managed to cut down their personal unsecured debt compared to the previous year, whilst another five hundred still had a similar debt.

Unfortunately their research included over four hundred participants who said that they owed nothing the year before, but they do now.

These results bring into question if the UK economy is in a recovery period, or if the public are just purchasing more on credit, which will only give them more debt and delay the inevitable.

Kevin Mountford, head of banking and PR spokesperson at moneysupermarket.com commented:

It makes me question how much of a recovery we are seeing if people are spending on credit rather than using money they actually have.

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