CCC foresees CPR for the working man relying on short term loans

There has been much written recently about the way that the economy has well and truly avoided a double-dip recession and hasn’t everyone done well to get us out of this scrape. However, there are whisperings (quite loud and vociferous ones) from certain corners that all this back-slapping is premature and, details in one recent report suggest, even naive.

There have been signs, such as the IT and service industries reporting steady growth and other recovery barometers returning improved figures, that the end may be in sight. But growth for the year ending 2011 only achieved 0.8%, according to this study, which is the worst return when exiting an official recession that this country has ever known.  Factor in a decrease in private sector investment in business, down to only 5.6% in the last quarter of 2011, which will impact around budget time, and you do start to see why the cries of naivety carry so much credence.

One only has to look at the number of households relying on short term loans to get them from one pay cheque to the next – and this is middle income households, too, not just low-income families – that, unless someone has a defibrillator to hand, recovery is a very long way off for the majority of UK households.  Clear??

The criticism of the back-patting being issued from several corners is that, against the backdrop of no real U-turn, much has been made of a 4% rise on the High Street in January. The underlying cause for concern is that this increase in expenditure only came about because of households awaiting sales after Christmas due to pressures on their budgets prior to the 2011 festivities and the improvement was only postponed from figures that should have been recorded in December.

The Consumer Credit Counsel have also issued grave concerns about household expenditure. Due to the amount of people turning to short term loans and other short term loan facilities, the average family is now paying almost £200 pcm in interest alone, representing almost a quarter of expendable income. This figure would be much worse if it wasn’t for incredibly low base rates on long term, secured loans.

The economy has the blame lying at its feet. Although there may have been some slight, mediocre upturn, this has still to be vindicated in any real acid test and more accurate assessments will be available once February has been and gone to give us a true picture. The one the CCC portrays is no oil painting, that’s for sure.

Commodity essentials are rising in price way in advance of salaries and it seems that the predicted 3.5M households turning to online instant cash loan lenders may be conservative by the time we reach summer, the time frame set for that assessment. The actual loan per household may be slightly lower at the minute because of the reduced base interest rate but the burden of managing that debt is becoming an ever increasing problem for the CCC.

On the horizon, the axe is still to fall on many public sector jobs in the Con-Dem austerity drive and the 3M unemployment figure is looming larger with every passing week. For the millionaires in the cabinet and the Captains of Industry, the economy may be looking like it’s turned a corner. For the man on the street, it’s an uphill struggle with no end to the road in sight, only the monthly step across the bridge until payday via the online quick cash advance lenders who seem the only ones interested in helping the working man keep food on the table

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