The economy could find itself in as deep a recession as the one that struck in 2008 if the eurozone were to collapse, an expert has said.
Chief economist at the Institute for Public Policy Research Tony Dolphin said the most likely outcome is that the recession will be comparatively mild and economic growth will return going into next year.
"Only if Europe does collapse into a horrendous mess and a really deep recession which washes over on to us, would we see anything as bad as 2008-09," he stated.
While that may not be the most likely situation, even the current problems may cause deep difficulties for those struggling with debt and finding the lack of wealth generation in the economy is holding back their ability to pay it off.
Although Mr Dolphin expects the economy to start growing again soon and many other economists might agree, a study by investment bank Morgan Stanley recently concluded that Britons have seen their disposable income fall by £50 this year in real terms, with a £200 drop to come next year.
It blamed this projected trend mainly on the prospect of rising energy bills.
Posted by Paul Thacker