Friday, August 24, 2007

Buy now pay later is ingrained in UK consumer culture

UK Consumer Debt More Than GDP

Well and truly gone are those days when saving for goods or a rainy day was the norm. Consumer debt has risen 10% since this time last year and now stands at £1,345bn. Debt now exceeds the entire output of goods and services according to accountants Grant Thornton.

Posted by denzil @ 06:56 PM (789 views)
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3 thoughts on “Buy now pay later is ingrained in UK consumer culture

  • I always think of the lead actor Michael Kitchens playing Dandelion Dead about the Major Herbert Armstrong case. At the end the fact that he is about to be hanged concentrates his mind.

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  • Comparing the total amount of debt with the annual totals of goods and services makes no sense. Most mortgage payers are not intending to pay off their mortgage in a year. It would be more useful to compare the total interest bill for the year with the GDP.

    If GDP and total debt really is important then the solution is simple. Slow down the speed of the earth’s orbit around the sun – drag out the year to 15 months and GDP will go up by 25% – plenty of headroom above total debt to head for the shops!

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  • Read this in the news (reuters) and wondered if anyone could explain it in laymans terms.

    “Sterling strengthened broadly on Friday after the implied UK GDP deflator — a measure of inflation in the economy — hit its highest level since 1996.

    The implied GDP deflator picked up to 3.8 percent in the second quarter from 3.2 percent in the first three months of the year, the highest reading since the third quarter of 1996.”

    The GDP deflator to me seems to be the real figure for inflation rather than the fudged CPI, or is this an over simplificattion?

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