Financial News
- 16 September 2012, 2:42
Brits Hit By 'Never-Ending Recession' Fears
Five years after the collapse of Northern Rock, a survey shows that many Britons believe the economic gloom will never end.
The poll found that 14% of Brits believe their finances will never be the same again, while 47% doubt recovery will happen any time soon.
A further 18% of the country believes that the gloomy economic outlook will go on forever.
The survey by MoneySupermarket.com showed how with the Bank of England base rate sitting at an historic low, saving and credit rates show little parity.
The website said that while the average saving rate has dropped by 3.28% since 2007, savers still benefit from a rate six times that of the 0.5% base rate.
Although mortgage borrowers enjoy reduced rates, first time buyers continue to struggle.
Similarly, credit card rates have increased by 2.03%, despite the low base rate.
Recessionary fears adversely affect an economy when belt-tightening spreads across society - known by economists as the paradox of thrift.
Meanwhile, according to insurance giant Axa, austerity has now impacted Britain's rich.
The firm's big money index showed that austerity is now firmly gripping more affluent consumers as a third of higher earners switched supermarkets and dipped into savings to make ends meet.
It also showed that almost one in seven Brits across all groups cannot see a time when their income will cover their outgoings, rising to 20% among the most 'stretched' consumers.
Axa said the relentless squeeze on household finances was seemingly too much to face for some, and 6% of 'under-funded seniors' did not know how much debt they had on cards and loans.
It said 15% of young professionals and 11% of 'the stretched' actively avoided opening bank statements.
Axa UK marketing director Cheryl Toner said: "A pattern of relentless economising has set in since our big money index surveys began in early 2011, and it's showing no signs of easing.
"It's alarming to see that even those deemed 'untouchable', the more comfortable sectors, are now feeling the pinch.
"Severe cutbacks are evident almost regardless of affluence levels."
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what do you think?
blue side
We do have a problem talking ourselves out of recovery however David Francis is correct we are all spending time licking our wounds and demanding rights which deter employers from expansion. All that said what we lack is proactive policy and leadership and by that I am not going party political.
Christopher Hodson
It is about trust and the fact that the banks lost that trust and so it filters down. I was told 5 years ago that until the banks start to get that trust back little is likley to change. At the moment it is a self preservation society. Somehow we need to break the chain if we are going to progress and recover
Name witheld
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gengisken1227
Having a government that believed in the natural rhythm of economic life would be a start, if a business makes bad business decisions, it should fall & that includes any bank.
Eric Coster
The little worker ants build the hive, not the fat queen!
Jonathan Goodwin-Self
The BoE has destroyed private pensions with QE and is destroying savers with the rate at 0.5% but they lend money to banks at 0.1% and banks then increase mortgage rates, loan rates, overdraft rates and pay on deposit accounts 0.01% interest. Mervyn King says that he wants the base rate at 0% and when he retires he will be getting about £200,000 a year in a pension even though he pays nothing in. Before the collapse a mortgage rate was 2% above base rate but now the lowest is 3% above but for that you need a 40% deposit and it is for 2 years and then it would increase to about 6%
David Francis
11:30am on 14/9/2012
I do hope all those advocating public sector strikes read this one! It backs everything I've said about having to reduce the level of 'rights' and associated benefits. We have to admit that we cannot afford to live like we used to.
Eric Coster
10:18am on 15/9/2012
We will live like we used to, but it will be the Victorian Britain of Charles Dickens.