Consumers tempted to finance purchases on credit “have been scared into being responsible” by rising unemployment figures, a financial expert said this week.
Motley Fool director David Kuo said media reports of soaring unemployment have encouraged Brits to take a sensible approach towards finances.
People are “rightly concerned” to be worried about their jobs as one in ten people able to work are likely to be out of a job by the end of the year, Kuo warned.
As such, instead of spending their spare cash on unnecessary purchases, consumers are using the money to pay off debt or to fund a savings account.
This is “no bad thing”, Kuo said, “because the only way that the UK can dig itself outside of this hole is to get consumer debt down to a more sensible level.”
Consumers will loosen their spending habits again when they see unemployment rates easing, Kuo predicted.
There are currently 2.26 million people unemployed in the UK.
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