The taboo about debt is shrinking to the point where partners will be more willing than they used to be to reveal to their other half how much they owe.

This is according to a study by the Consumer Credit Counselling Service (CCCS), which revealed that only 14,071 people who approached it for debt help last year had not told their partner about this.

Such a figure compares with 16,424 keeping it secret in 2009, while in 2008 the figure was 17,477.

According to the CCCS, this is a positive sign as the strain of dealing with debt problems can be made much worse by people keeping it secret, whereas couples can often deal with a situation better if they act jointly.

Director of external affairs at the charity Delroy Corinaldi commented this is a good thing because "a problem shared is a problem halved".

He suggested the trend represents a sea change in attitude from before the onset of the credit crunch and economic downturn, suggesting: "It may be that people are more aware of the difficulties that debt can cause and are therefore more willing to talk about any problems they may have."

Another party those in debt should share their problems with is people they actually owe money to, director at MyMortgageDirect Catherine Hearnden has stated.

She said that in the case of mortgage lenders, consumers may find they are "quite helpful" as pressure has been placed on banks by the public and politicians to "show compassion" and go easy on those with mortgage arrears and not repossess homes.

Posted by Paul Thacker
 

A former captain of industry has predicted the current rate of inflation will soon start to slip back – something that could make it easier for people to carry out debt consolidation efforts.

Former director general of the Confederation of British Industry Sir Richard Lambert said: "There is every reason to hope that inflation will pass the peak at the turn of the year and decelerate fairly rapidly thereafter.

"Once the impact of the VAT increase and these supersonic energy price increases have passed through the system, I think we will see the numbers settling down."

Sir Richard said that once this has happened, the Bank of England may help bolster economic growth by increasing the level of quantitative easing (QE), which he said could be carried out without adding much to inflation.

This would be more effective than any new government schemes aimed at boosting the economy, which he said would be "moderately helpful" without having a huge impact.

The expert suggested the outlook will be for matters to improve and get brighter if there is more QE, although it would still take some time for the feel-good factor to return and consumer spending will remain subdued in the short-term.

Minutes of the Bank of England's Monetary Policy Committee meeting earlier this month revealed that of the nine members, only Adam Posen voted for an extension of the QE scheme, calling for it to rise from £200 billion to £250 billion.

However, it also noted that some others agreed that if the current economic weakness persists, there may be a strong case for further asset purchases.

By Joe White
 

Consumers are right to be trying to carry out debt consolidation strategies, but this comes with its own negative consequences, an expert has said.

Head of consumer finance at lovemoney.com Ed Bowsher said the decade before 2008 saw Britons go on a "massive borrowing binge" that will take "years to pay off".

He said many people are doing this – including himself, but it is not easy for some because of the economic consequences of the credit crunch, financial sector crisis and recession.

"If you've not had a pay rise since 2008, or lost your job, you're always going to struggle to pay off your debts," Mr Bowsher observed.

However, the expert explained, the problem is a cyclical one. Just as the debt caused the economic crisis and this in turn has led to job losses and falling incomes, it is also the case that the economic recovery is being held back by people's efforts to get debt free.

"Our thrift … isn't helping the economy. Less spending on the high street means slower economic growth, "Mr Bowsher explained.

This being the case, it could be that additional help – such as a debt management plan – may prove a useful to aid some struggling consumers, since the situation is one where a swift and strong economic recovery is not going to come to their rescue.

Such a point was emphasised by business secretary Vince Cable in his Liberal Democrat party conference speech this week, where he warned that Britain was embroiled in the economic equivalent of "war", with the "sunny uplands" of economic recovery a long way off.

One of the key problems is that Britain ran up higher consumer debts than just about anyone else, he concluded.

Posted by Paul Thacker