British Consumer Credit Continues to Plunge

British Consumer Credit Continues to Plunge

Credit cards and other lending businesses to British consumers had the sharpest drop in nearly two decades in December, which strengthen the expectations that Bank of England will soon bring in more cash assistance into the economy to prevent a further deep recession.

A devastating decline in cash supply further added to conjectures that 75 billion pounds in asset purchasing which was launched in October is not enough to strengthen the economy, which may have already been experiencing a recession during last year’s last quarter.

Consumer credit declined by 400 million pounds as of last month, which is the biggest drop in a monthly accounting since it started in 1993, the bank announced on Tuesday.

The weakening of the consumer spending spree has been seen as the major factor on the decline of the Britain's economy, which is the result of the consumers’ cutting back on expenditures and purchases to ease up the rise in the cost of living and has been made worse by the meagre wage increases and job losses.

Economists said that the figures eventually confirm their expectations that the Bank of England would inject more assistance into the economy.  Most likely, the bank will announce its 50 billion pound expansion to its financial assistance program by next week.

Nida Ali, economic adviser to the Ernst & Young ITEM Club said that “the fall in consumer credit reflects individuals' reluctance to take on more debt in a tough economic environment."

The Bank of England and the government have high hopes to recover on their declining economy later this year.

Posted by James Fried on Tuesday February 07 2012, 4:36 AM EST. Ref: Yahoo. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0