Christmas as usual, or not?

Credit Action’s monthly debt statistics came out today including a Christmas season special report. Despite shrinking economy, falling stock markets and gloomy times ahead, 57% of UK consumers will spend the same this Christmas as they did last year, for many people in the UK, this year will be Christmas as usual.

This may come as good news to the retail industry as the reduction in VAT that comes into force today. A lot has been said in the past week since Chancellor Alistair Darling announced the cut in his pre-Budget report in a bid to encourage consumers to spend more and boost the economy. A 2.5% reduction in VAT in many cases is dwindled by the massive reductions on most high street stores this week, some of them cutting prices up to 50% to lure shoppers into their stores and try to salvage the pre-Christmas season.

But reduction on VAT or massive shopping discounting is not going to help cash-strapped families who turn to credit to pay for Christmas, these families could be setting themselves for a New Year debt disaster, children’s charity Action for Children is warning. Read the full research findings here.

This entry was posted on Monday, December 1st, 2008 at 3:32 pm and is filed under Credit crunch, Debt.