UK families ‘ill-prepared’ to face economic squeeze

Many families in the UK are not in a strong enough financial position to face the economic squeeze that is set to come in 2008, according to one MP.

Phillip Hammond, a treasury spokesperson for the Conservative Party, has claimed that prime minister Gordon Brown’s mishandling of the economy has left British households facing serious financial problems.

With millions of people already struggling with debt management problems, a recent report from Capital Economics has shown that energy prices look set to rise considerably faster than real household incomes this year.

“A hike of nearly £200 on household bills means yet more pain for families who are already feeling the pinch from higher mortgage costs and soaring food prices,” said Mr Hammond.

“Gordon Brown’s economic incompetence has left Britain ill prepared to cope with a squeeze like this. It is ordinary families who will be left to pick up the pieces.”

Including mortgage arrears, the average household debt management burden amounts to more than £56,000 in the UK, according to the latest figures from the Credit Action charity.