Fears of an official recession have many government officials and financial institutions wringing their hands with worry. But for the average consumer it doesn't really matter what the economists and market pundits predict or declare. Most of the UK population is already experiencing a recession on a personal or household level, and no amount of number crunching or financial juggling will do anything to change that stark reality.
One thing that could help, however, is a so-called "bad credit" loan. These are special loans extended to those with poor credit, and during recessionary times like these, they represent one of the last lines of defense and one of the best ways to access a line of credit to help weather the storm. Bad credit loans can provide emergency funds to help get back on solid financial footing, or they can be used on a longer-term basis for mortgages and other major but necessary expenditures.
Such loans may be a lifesaver if the situation persists. Roger Bootle, managing director of Capital Economics, was quoted by the Telegraph as saying that the growing financial crisis has increased the chances of recession in the UK as families struggle with their finances.
o The government may need to raise taxes even more and scale back benefits to offset the nation's economic problems, which would only put more pressure on the average consumer.
o Petrol prices are going up with no end in sight, and the cost of transporting all sorts of consumer goods is going up as a result. Those increases are being quickly passed along to retail buyers, so that the average UK consumer is bearing the biggest burden of all.
o For example, the Bank of England has been forced to lower its interest rates twice in an effort to jumpstart the slumping economy. But mortgage lenders, credit card companies, and others who sell their financial services and are experiencing difficult time have not passed those price cuts along to their customers.
Meanwhile the news from across the puddle indicates a growing sea of debt that will soon wash ashore in the UK and likely prove that the turmoil in the USA is contagious - especially for economies that are so closely connected to it as is that of the UK.
"The underlying trends are horrible, with worse to come," reported the Guardian, citing prominent economist Ian Shepherdson of High Frequency Economics in New York.
With the unprecedented fall of Northern Rock - the first run on a UK bank in 100 years - and a rescue effort to save it that will eventually cost taxpayers about £25 billion - the economy signaled a severe crisis of staggering proportions. The bailout of the failed bank was mirrored on Wall Street, where one of America's legendary investment banks - Bear Stearns - fell apart within a matter of days. Stock in that company traded for around $160 per share last year, and hit $2 in mid-March.
The Telegraph reported that millions of British households will feel the aftermath of these events as mortgages become harder to get and monthly debt rises. One sign of recession is rising unemployment, and when Bear Stearns fell, fears rose that the company's 1,500 London-based employees might find their jobs or salaries in jeopardy - like so many others in the UK have already experienced.
However those companies that intentionally specialize in bad credit loans are welcoming distressed Brits with open arms - and open purse strings. If you find yourself faced with the dilemma confronting most of us during these turbulent times, you may want to explore the option of a bad credit loan as a financially prudent alternative.
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