What sort of financial state is Tony leaving Britain in?

Millions of viewers saw Tony Blair, Britain's Prime Minister, make his resignation speech in his own constituency last week.

Mr Blair touched upon a number of topics during his speech, apologising to the nation for his mistakes, swearing that he'd always done his best, and adding that the country had come a long way in the last ten years, with improved education, reduced crime, better housing, and shorter waiting times for medical care and attention. And perhaps so – but what about the financial state of the country?

The current government and Mr Blair have made a number of changes over the past decade that have undoubtedly done the country good, and they have also made their fair share of mistakes. On the day that Mr Blair officially announced his resignation, inflation had stormed through the government's target rate of two percent, standing at over three percent, and resulting in increasing interest rates. The interest rate has gone up four times in the space of the last nine months, although only by 0.25 percent each time.

In addition to this consumer debt in the UK has exceeded a whopping £1.3 trillion, with many consumers struggling to try and manage their finances. And for the first time bad debt levels have burst through the one hundred thousand pound barrier, with more consumers than ever opting for insolvency, IVAs, debt management programs, and even bankruptcy. Some experts think that a range of factors including student loans and overly easy access to finance have something to do with the situation.

And finally, house prices in the UK have soared so high that for many young people the attempt to get on to the property ladder is a futile one. Even those that do manage to now get a mortgage and deposit together, there are higher interest rates to deal with, which means more expensive repayments.

Tom Smith
21.05.07

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