Higher unemployment could lead to debt deferrals
01 July 2009
By Gary Huddless
The current high rate of unemployment could mean a huge number of people are unable to keep up with debt repayments.
That is according to David Kuo, director of financial information company Motley Fool, who said that people may turn to credit in an effort to "sustain their living".
However, many will be unable to gain access to funds, according to Mr Kuo.
He said: "What we are seeing at the moment is banks are reluctant to lend money to people. We see this month on month.
"They are not going to be able to repay their debts and so consequently, the banks are not going to lend money to people."
Mr Kuo''s comments come after new data released by the Organisation for Economic Co-operation and Development which suggested that unemployment could reach ten per cent by 2010.
According to Credit Action, personal debt in the UK stood at £1,459 billion in June 2009.
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