Consumer debt may be driving pessimism over economy

The negative feelings people may derive from being in debt could contribute to their broadly pessimistic view of the state of the UK economy, which was indicated in a new poll.

Ipsos Mori surveyed consumers in 24 nations about the state of their nations' finances and in the British case, only 13 per cent said the economy is in a "good" state.

This made Britain the sixth worst in terms of public perceptions, with the five countries below it being France on 12 per cent, Italy at ten per cent, Japan on eight per cent and Hungary and Spain bottom of the pile at six per cent each.

Not every country has such a pessimistic outlook, with some nations being made up mostly of people whose view of their economic prospects is a positive one.

This includes 76 per cent of Swedes, 69 per cent of Canadians and 68 per cent of Germans.

An Ipsos Mori spokesman said: "In the wake of the debt crisis, it's no surprise that the British public remain among the most negative worldwide, along with a group of major European countries including Spain, Italy and France.

"Coupled with the cost of living increasing rapidly in comparison to earnings, it's not a shock that confidence isn't improving."

Those whose pessimism is linked to being in severe debt may find an IVA the best solution, as it can reduce the amount they have to repay each month and ensure they are debt free in five years or less.

Commenting on the UK government's economic growth strategy last week, senior economic advisor to the Ernst & Young ITEM Club Andrew Goodwin said it will be "several years" before it becomes clear how well – or not – it will have worked.

By Joe White