People may be facing debt management problems or seeking debt help due to the suddenness of the economic slowdown, comments by a financial expert suggests.
While a gradual decline would have prepared consumers, the rapid move from a healthy economy to one on the verge of a predicted recession “caught people out”, according to Moneyfacts.
“It’s gone from one extreme to another,” head of public relations Darren Cook said.
A steady change over one or two years would have allowed people to adapt, but “it’s only now in the last three to four months that it has knocked on the front door and actually affected the consumer”, he explained.
Mr Cook said people may have heard of banking problems but increases in fuel and food prices have recently caused a drop in consumer confidence.
The July Nationwide Consumer Confidence Index in partnership with TNS found 61 per cent of people believe the present economic situation is bad and 85 per cent said they expect it to be the same or worse in six months’ time.
By Morwenna Kearns