Abacus Daily Debt News

Indebted people ‘not learning from the recession’

The economic downturn has done little to impress upon people the problems of borrowing money, a new report has suggested, with recent statistics showing a rise in debt levels.

Findings from new research by Unbiased.co.uk revealed that, during the second quarter of 2009, £5.5 billion was borrowed by people, almost twice the amount in the first quarter of the year.

"The financial turmoil of 2008 prompted a dramatic retreat from savings in favour of repaying personal debt. The first half of 2009, in contrast, has seen consumers … shift back into borrowing," Unbiased.co.uk’s chief executive David Elms said.

However, he observed that Britons are starting to save their money again, irrespective of low interest rates.

Last month, Hetal Mehta of the Ernst & Young Item Club noted that the Bank of England’s Monetary Policy Committee is sure to keep the UK’s base rate down, with inflation expected to fall below the government’s two per cent target.

By Sarah Adie