The number of people requiring individual voluntary arrangements (IVAs) may be set to rise, if a new warning about the global economy proves to be acc…
The number of people requiring individual voluntary arrangements (IVAs) may be set to rise, if a new warning about the global economy proves to be accurate.
In its latest World Economic Outlook, the International Monetary Fund (IMF) said the global economy has entered a "dangerous new phase" of low growth, with the potential danger to become a new world recession.
Although it did not actually forecast a new contraction, it lowered forecasts for growth across the globe and in specific areas.
As well as predicting a slowdown in the eurozone, it also tipped the UK to only see gross domestic product expand by 1.1 per cent this year and 1.6 per cent in 2012 – down from the 1.7 per cent and 2.3 per cent previously predicted.
Such a situation may have a negative impact on those trying to pay off their debts, as a weak economy may bring many more job losses and therefore undermine the ability of some to pay what they owe.
Faced with debts piling up, some may wish to consider an IVA, as this can reduce monthly repayments, freeze interest and set a time limit on debt, with the revised schedule of payments lasting no more than five years and anything left being written off after this time.
UK government economic policy has come under fire from some critics, but in a speech earlier this month at the London School of Economics, deputy Prime minister Nick Clegg insisted that switching to a "plan B" is not an option.
He said a key element in generating economic growth is investment in infrastructure projects such as better road and rail links.
By James Francis