Unemployment and slow economy to add to debt worries?

More and more people in Britain could soon be facing debt concerns following the release of new statistics.

Figures compiled by the National Institute of Economic and Social Research have predicted slow economic growth and rising unemployment in the next two years.

They show that gross domestic product (GDP) will increase by just one per cent in 2010, before picking up to two per cent and 2.2 per cent in 2011 and 2012 respectively, which is below the estimated trend.

Consumer spending will rise by only 0.3 per cent this year and will “remain subdued” for the 12 months after.

Following the record fall in productivity of 1.8 per cent in 2009, unemployment is expected to peak at 2.7 million in 2011, while the jobless rate should reach 8.7 per cent.

John Lyons, chief European economist at Capital Economics, recently forecast a weak economic recovery in 2010 when speaking in response to the Office for National Statistics announcement that GDP had increased by 0.2 per cent in 2010’s first quarter.

By Joe Shervin