Debt problems more likely in former boom areas?

Regions and districts that saw an economic boom between 2004 and 2007 have been among the worst-hit by the recession, a new survey has indicated.

The Confederation of British Industry’s (CBI) study into structural unemployment observed this was the case for places with a “cyclical economic boom” rather than “sustainable structural improvement”.

People living in such areas who prospered and then borrowed money might be among those who will have debt problems, due to losing their source of income.

And those with debt management issues around the country may have varying prospects for getting better jobs in the future, the CBI noted, stating the notion of a north-south divide in joblessness is too simplistic.

It advocated tackling structurally high unemployment levels in certain parts of the country by encouraging investment in such areas and reducing dependency on the public sector.

Examples of how some cities have fared better than others include Manchester – where the presence of high-tech industries has limited job losses – in comparison with less-skilled Liverpool.

Overall, it is urban areas across the country where joblessness is higher, with the rural county of Cumbria cited as an example of a part of the north with a low dependency on the public sector.

In the meantime, those in areas where the economy is particularly weak at present may wish to seek advice on how to get debt free rather than hope to find new jobs with higher pay as a solution, since the latter may be in short supply.

The report comes as the latest Lloyds TSB Production Manager’s Index has indicated London is not currently the fastest-growing part of the UK.

Instead, the east Midlands is seeing the speediest increase in its gross domestic product.

By James Francis