ECONOMY GROWING FASTER THAN EXPECTED BUT PERSONAL DEBT WORRIES PERSIST

The UK’s economy grew at 0.8% between July and September according to official figures from the Office for National Statistics (ONS). That growth is double the 0.4% expected by most analysts.

“This is the second major GDP growth surprise in a row and suggests that the UK economy is more resilient than many had feared,” said James Knightley, economist at ING.

“The government will no doubt take this as a sign that the private sector can fill the gap created by public sector cuts, but with consumer confidence, hiring intentions surveys and housing activity data all softening we remain cautious.”

The key is that phrase “hiring intentions”. I am a glass-half-full person, so I like to focus on the facts that the GDP increase is double what was expected and that it’s the strongest third-quarter figure in a decade, according to the BBC’s Stephanie Flanders.

However … a growth in GDP does not necessarily – and quickly – improve the lot of the majority of people in this country, particularly those who are already in debt or who face losing their jobs as a result of the recently-announced spending cuts. Our economy is still rather dependent on relatively non-labour-intensive sectors, e.g. financial services, so today’s good news is “necessary but not sufficient”.

Until those “hiring intentions surveys” also show a rise, there will still be large numbers of people going into bankruptcy or taking out an IVA (a Protected Trust Deed in Scotland).

I too was in that situation not so long ago. However I found another way, which I detail in my book “Back to the Black: how to become debt-free and stay that way.”

What is also encouraging is that construction seems to be showing the strongest gains in the last couple of quarters, as this would lead to job creation more than some other sectors.

To quote Stephanie Flanders again: “There is still plenty to worry about in this recovery: much of it beyond our shores, and beyond the government or the Bank of England’s control. But for today at least, I think we’re allowed to join the cabinet in a sigh of relief.”

Here’s a link to that Stephanie Flanders piece: http://www.bbc.co.uk/blogs/thereporters/stephanieflanders/2010/10/good_news_on_gdp.html

If you want to know more about how I personally escaped the threat of bankruptcy and IVA and found another way, go to www.back-to-the-black.com

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