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Ash4781

Consumers Finally Tighten Their Belts

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http://www.telegraph.co.uk/money/main.jhtm...24/cndebt24.xml

Datamonitor predicts that the "next five years will be difficult for lenders" as gross lending climbs at a sedate 3.2pc a year. Last year, gross lending fell by 4.5pc to £208bn, taking the average adult's credit exposure to £4,522.

In its report, Ernst & Young predicts that consumers will "spend the next 12 months tightening their belts, paying off debt and saving every penny" because "economic confidence levels have dipped to their lowest since March 2003". The research found that 73pc of consumers plan to save, compared with 68pc three months ago, and that 61pc have savings products against 58pc last year.

Homeowners are shifting the debt burden on to their property, with 45pc of people remortgaging in 2006 increasing the level of their loan. Last year, the total value of mortgages rose 20pc to a record £345bn - with remortgages accounting for half the market.

As a result of the changing credit climate, Experian has switched its sales focus to debt mitigation. But chief executive Don Robert is "confident of resilience" in the business, which posted a 28pc drop in pre-tax profits to $394m (£195m) after the $149m cost of demerging from GUS last year. Group sales rose 11pc to $3.49bn and it announced a final dividend of 11.5 cents, payable on July 27, taking the total to 17 cents.

Recession looming ?

Edited by Ash4781

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Like's like 2005 all over again. The BoE should pull out another 'greenspan put' and cut rates. It worked last time.

Quite, borrow recklessly, Merv will always bail you out.

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I know a guy that delivers cars on a part time basis. He is a pensioner, gets minimum wage and drives cars to the customer after they have ordered off the internet. He has been doing it for about five years with about 2 long distance runs per week (up to 200-300 miles roundtrip) and then about 5 - 6 short runs (10 - 60 miles roundtrip).

Since mid April he has not had a single delivery to do! Its not just him but none of the part timers have had any work at all. This is surely a huge sign that the economy is slowing. Cars are a huge discretionary spend item.

He delivers to private as well as corporate buyers so it is right across the board and right across the country. The company he works for has a few full time staff who are still busy so its not like no one is buying a car at all but given that internet car buying has expanded rapidly in the last few years that is a huge slow down from even six months ago. Seems to have coincided almost perfectly with the rate rises. The tipping point appears to have been reached.

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I know a guy that delivers cars on a part time basis. He is a pensioner, gets minimum wage and drives cars to the customer after they have ordered off the internet. He has been doing it for about five years with about 2 long distance runs per week (up to 200-300 miles roundtrip) and then about 5 - 6 short runs (10 - 60 miles roundtrip).

Since mid April he has not had a single delivery to do! Its not just him but none of the part timers have had any work at all. This is surely a huge sign that the economy is slowing. Cars are a huge discretionary spend item.

He delivers to private as well as corporate buyers so it is right across the board and right across the country. The company he works for has a few full time staff who are still busy so its not like no one is buying a car at all but given that internet car buying has expanded rapidly in the last few years that is a huge slow down from even six months ago. Seems to have coincided almost perfectly with the rate rises. The tipping point appears to have been reached.

Interesting story. We should watch reports by credit card companies. Possibly we will also see increased use of CCs soon, when MEW finally dries up.

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