A new year says good-bye to debt

Posted 2007-12-7

Recent figures from the British Retail Consortium (BRC) reveal consumers spending less on larger items in September. Despite an effort by retailers to strengthen profits, many consumers are looking to relieve personal debt by avoiding store shelves.

Experts like Howard Archer, chief UK and European economist at Global Insight, expects the recent trend to continue and for consumer spending to “soften notably over the coming months.” 

However, the decrease in consumer spending may do more harm than good. Without the support of consumer spending many merchants will produce poor profits. The result, Mr. Archer added, could be indicative of a decline in the national economy. 

“Price promotions and cuts in base prices are widespread across all sectors,” explains Kevin Hawkins, Director General of the BRC. “The Bank of England will also be more inclined to cut interest rates if it sees that retailers are increasingly engaging in substantial discounting.” 

Consumers may be surprised to learn of a more effective method of tackling personal debt than doing without the goods and services they seek. Debt consolidation loans provide a large lump sum which could be used by consumers to pay off multiple lines of credit and merge their borrowing into a single monthly repayment. 

Over the course of the New Year, this could alleviate consumers’ debt and start many people back on the right course of spending, thereby ultimately re-strengthening the economy as a whole.

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