However, In Spite Of Such Concerns, Consumer Spending Is Still At Higher- Than- Average Levels

Category: Finance, Credit.

Britons are under more intense financial pressures, a new study has shown.

The score was indicated to be one of the lowest the institution has recorded since it first began its quarterly study some 11 years ago. The latest Financial Reality report by the Alliance Trust Research Centre revealed that the country s economic wellbeing fell by ten percentage points between the third and fourth quarters of 200In the three- month period between July and September the index stood at 86 before falling to 77 in October to December. In addition, this decrease was revealed to be the largest fall witnessed for 18 months. In addition, it was put forward that people currently have to cope with a higher burden of debt than they had to in previous months. According to the company, the nation is developing fiscal difficulties in the face of rising food and transport costs. However, in spite of such concerns, consumer spending is still at higher- than- average levels.

Shona Dobbie, head of Alliance Trust Research Centre, said: "Our latest Financial Reality report highlights how acute the consumer s predicament has become. Indeed, such figures could indicate that households are increasingly struggling to manage the various demands on their spending such as personal loans, household bills and, mortgages store and credit cards. Our measure of consumer wellbeing shows a worsening picture not only for household budgets but for consumers net wealth and the economy as well. We are seeing particular pressure on budgets with higher food and fuel prices and heavy levels of debt and mortgage payments. " Ms Dobbie went on to claim that Britons may find that they are coming under more intense financial pressure in the month to come. This is the first time since the end of 2004 that all these elements that make up consumer wellbeing have fallen at the same time. She pointed towards a curbing in house price growth, the last three months being the" poorest quarter on the stock market in four years" and increasing levels of debt, which could include money owed via loans and plastic cards, as factors which are set to place further constrain on household spending.

She also reported that the study indicated many people have being spending beyond their means for the past two years, which has led to them facing" ever higher levels of debt" . The Alliance Trust chief stated that, following on from such strains on budgets, consumer expenditure is set to slow over the course of 2008, despite the fact that" current spending levels show people have yet to take full stock of their financial reality" . Britons worried that the prospect of more financial pressures will place their capacity for money management into an untenable position could discover that a consolidation loan provides a solution to their problems. This may be particularly helpful for people struggling with money in the wake of the Christmas season. In taking out this type of low- rate loan, borrowers could alleviate the multiple strains that their spending is currently under. A recent MoneyExpert study indicated that about 6 million consumers are looking to switch credit card debts after spending during the festive period.

For such consumers, a cheap consolidation loan might prove to be of great assistance. However, it was claimed that the 6 million Britons who are set to stay with their provider will face an average interest of 182 per cent attached to their borrowing.

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