By Chathushka Perera
LONDON, UK (CWBN)_ Earlier today, the UK reported an economic growth of 15.5% in the third quarter (July-September), indicating a slow recovery for the first time since the Covid-19 outbreak, which lead to a 20.4% drop during the previous quarter.
However, the development has not been without its implications. Business shutdowns and unemployment are at an all-time high, which has given rise to an exponential growth in debts and arrears grew by at least 66% since May, according StepChange, a debt charity based in Leeds, UK. The total amount of debt thus far totals to about GBP 10.3 billion, with 1.2 million people put in critical risk while another 3 million are falling behind with the payments.
Reportedly, up to 14.9 million, which is 29% of the adult population in the UK, people had their finances distorted during the first lockdown in March.
Chief Executive of StepChange, Phil Andrew, stated that the country is “sleep walking into a debt crisis” as the government continues to mismanage the Covid situation in the UK.
A parliamentary committee report, titled “Universal Credit: The wait for a first payment”, published last month, alleged that the universal credit system had pushed many low to middle income households to expect the services of high interest lenders, due to payment delays.
While household expenses have dropped significantly over the past months, according to a report issued jointly by the Save the Children and Joseph Rowntree Foundation, 70% of British families have been cutting down of essential expenses such as food, utilities and rent. Additionally, 7.1 million of those who are majorly affected by the crisis, average a GBP 1,365 in arrears and GBP 1,577 in debt.
Irrespectively, the economic situation in the UK is expected to take a turn for the worse as the country instated a second lockdown.
Edited by Elishya Perera
