IVA tally may rise as eurozone ‘set to drag UK into recession’

Britain is set to be pushed into a new recession by events in the eurozone, investment experts have said.

Jeremy Tigue and Ted Scott of F&C investments told a briefing in London yesterday (November 30th) that the situation in the single currency bloc is nearing a decisive moment, which will probably either see "quantitative easing, full fiscal union or a break-up of the Eurozone in its current guise," according to Mr Tigue.

Mr Scott said some eurozone states may already be back in recession and he added: "If the Eurozone, including Germany, does fall into widespread and full recession, it will probably tip the UK into recession as well, as Europe remains our largest trading partner."

If this does happen, many Britons could lose their jobs and the result will be in some cases that debts they were once able to manage comfortably suddenly become unpayable.

For those owing £15,000 or more, an IVA may be the best solution, as this can reduce the monthly payments, lead to interest being frozen and ensure the revised amounts paid only last for five years at the most.

This can be agreed as long as the proposed deal is accepted by 75 per cent of creditors.

Fears of a new recession are widespread and in his autumn statement this week, chancellor of the exchequer George Osborne acknowledged that if Europe goes into recession, another UK contraction will be "hard to avoid".

And even the Office for Budget Responsibility's low UK economic growth forecast of 0.7 per cent in 2012 is based on the idea that the eurozone can find a solution to its present difficulties, he noted.

Posted by Paul Thacker