Debt iceberg: Disappointment at rate of economic growth

27/01/2010

People struggling with debt could face continued struggles as a leading investment solutions provider has highlighted the poor state of the UK economy.

Threadneedle suggested that the 0.1 per cent growth in the economy during the final quarter of 2009 was not the ideal way to have exited the recession.

Sam Hill, fixed income fund manager at threadneedle, said that the figure is "the least convincing performance" the economy could have achieved in order to confirm an end to recession in Britain.

"Had growth been in line with expectations at 0.4 per cent, the debate on February's meeting of the Bank of England's Monetary Policy Committee would have come and gone without much speculation on the prospects for an extension to the £200 billion injection of new money into the economy, but today's data puts the topic back on the agenda," he explained.

While the growth figure may have been lower than expected, the news that recession is over in the UK has been welcomed, as the downward economic trend was the longest in Britain since the end of the Second World War.

Last month, threadneedle said that investors have reason to be "cautiously optimistic" during the course of 2010, although the company did warn of a "bumpy ride".

Director of EuroDebt Kevin Still commented: "The lower-than-expected expansion figures show how precarious the economy is and it is what lies below the surface of the personal debt iceberg that worries me with personal insolvencies and serious debt problems continuing to put a huge strain on the whole money and debt advice sector."

Tags; Current UK Economy,

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