Christmas might be a little short on finance this year
As the main UK lenders continue to pull back from issuing further credit lines to new and old customers many are starting to grow a little concerned about Christmas. The festive period has historically been based upon credit for many people as credit and shop cards go into meltdown, but this year looks like being very different.
Much like the way Egg contacted customers to warn that credit limits were being reduced there is speculation that a similar situation will arise again in the run up to Christmas. The bottom line is that the financial institutions cannot afford to take on more and more bad debt and need to protect there already reduced asset bases. Even if the economy was to start a recovery tomorrow there would still be a large time lag before this fed through to consumers.
Even though the retail sector is always predicting a bad Christmas, this year is sure to be the worst for a long time with many companies set to feel the pain just before and just after the festive period. Expect more large name bankruptcies and financial troubles after the New Year and beyond.
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