Public and personal debt to exacerbate recession

A report for the Centre for Policy Studies has said that thanks to the momentous banking bailout, public debt is on course to rise to 50% of GDP.

One alarming aspect of this report is that the figure is far higher than at the beginning of the last economic crisis in the early 1990s, when government debt reached 26% of GDP.
 
Personal debt is also growing substantially, with current figures estimating that it now stands at £1,408 billion, or £58,000 per household including mortgages.
 
Credit Action have stated that a cultural change is the only way to combat the debt problem of today’s society, and that Britons must re-learn how to manage their money.
 
Budgeting, keeping a money diary and making daily savings were just some of the adjustments suggested in order to wrestle the debt problem back under control.
 
Conservative shadow chancellor, George Osbourne sparked controversy at the weekend after he commented that Britain was “the worst prepared country in the world for recession” with the “highest personal debt in the world” and that “the pound has fallen by a record amount against other currencies.” 
 
However the report from the Centre for Policy Studies has gone some way in agreeing with Mr Osbourne, stating that “the combined effect of high levels of government and personal debt will exacerbate the depth of the recession.”

Article sourced from www.debtmanagementtoday.co.uk 19th November 2008