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Debt Collection News Roundup – July, 2017

Here at Access Credit Management we pride ourselves on keeping up to date with what’s going on the international debt collection industry.  We aim to bring our readers interesting and relevant news about the sector so once a month we publish a News Roundup.  This should keep you up to speed with all the important happenings in the industry and provide you with a valuable resource that that you can use to stay fully informed of all the latest news.  It would be interesting to know what you, the readers, think of the stories that feature here.  If you have any stories you think we should be covering or if you’d like to comment on this or any of our other articles, please do so on our Facebook page or tweet to us on Twitter.

The Bank of England has been warning of complacency over the big rise in personal debt and banks, credit card companies and car loan providers have been told they will face action against reckless lending.  This is the Bank’s toughest warning yet about the possibility of a rerun of the financial crisis that began 10 years ago (and of which we are still feeling the pinch here in the UK), as Threadneedle Street revealed it was worried about the increase in the amount of money being borrowed on easy terms over the past year.  Alex Brazier, the Bank director for financial stability, claims that there are classic signs of lenders thinking the risks were lower following a prolonged period of good economic performance and low losses on loans.  According to the Bank, families loading up on high levels of debt pose a danger to everybody else as they create a vicious circle for the economy.

It’s not just householders borrowing who are causing alarm, the government Budget deficit has seen a sharp rise recently, with government borrowing rising by more than expected to £6.9 billion in June, almost 50% higher than in the same month last year.  This rise followed an increase in the cost of financing the UK’s debt, a reduction in corporation tax receipts and a larger than forecast contribution to the EU in June.  The Chancellor is facing growing pressure to loosen the public purse strings but analysts reckon that recent figures are likely to toughen his stance on pleas from ministers for extra funds.  According to the Treasury, the persistent shortfall in the government’s income compared with spending demonstrates a requirement for a credible fiscal plan that would allow ministers to support sound public finances while promoting a stronger economy.

The news is just as gloomy for small business owners here in the UK as rising debts, delayed investment and higher business rates put pressure on small companies.  The latest research reveals that average levels of bad debt at small companies has increased by a massive 70% in just one year with the average level of debt written off as unrecoverable has risen to £20,043.  When SME owners were surveyed recently, many indicated that their key challenges are winning new business, finding and keeping skilled staff and managing their cash flow effectively.