Debt management need may rise as new recession risk ’50-50′

There is a 50 per cent chance of a new recession in the US and eurozone, an expert has predicted, something that may significantly affect Britons.

Economist Tom Higgins of asset management firm Standish stated: "Although reliable leading indicators – such as average weekly hours, jobless claims and new orders for durable goods – are not yet pointing to a recession, the sluggish pace of economic growth in the US and Eurozone endangers both economies to shocks that could easily tip them back into recession."

This could have major repercussions for the UK economy as these areas are major trading partners with Britain and if this happens, it could leave more people requiring debt management help as jobs could be lost and businesses suffer, not least exporters.

Mr Higgins said US growth levels have averaged around 0.4 per cent in the first half of this year, with the country being affected more by high oil prices and the Japanese natural disaster than previously thought.

He added that the situation is potentially worse, not least because the stability of the euro could be affected if France loses its AAA credit status as the country is a key supporter of the European Financial Stability Fund.

The UK's own economy has been struggling to achieve significant growth, with gross domestic product rising by just 0.2 per cent in the second quarter of this year.

Such a figure was the initial estimate of the Office for National Statistics, but has since been backed by the second estimate, published today.

Posted by Paul Thacker