Afternoon:
10°c
Like a salmon, I seem heroically to be swimming against the current of the times. The current in question is the way nearly everyone is paying off their debts. It's official. The Bank of England says so.
Personal debt has fallen for the first time since records began - which admittedly was only in 1993. Individual borrowing is down by £600 million in July, bringing personal debt to a mere £1.457 trillion. And if you exclude mortgages - which is boring debt, really, because there's no shopping involved - personal loans also came down, by a net £200 million.
This orgy of debt repayment is a party I cannot join. I speak as a former and present spender. That figure of £1.457 trillion - a bit of it is mine. In the good times, I did my bit to stimulate the economy, particularly the parts relating to the book trade, designer shoes, artisan food products, high-class organic cosmetics and - how can I put this? - drink. I was, and am, the consumer who makes commerce worth going into. It's the want of people like me that's keeping us in recession. Alistair Darling has been exhorting the G20 to spend its way out of the downturn; my instinct entirely.
Trouble is, in order to finance these purchases, I resorted to credit cards. At the last count I had six. Servicing them takes more than half my income. At least, it used to until I discovered that the Inland Revenue now takes credit cards for your tax bill. God only knows how much it is now.
And credit card debtors are probably the only people left in the economy who haven't benefited from the fall in interest rates. Mortgage payers are practically being paid to borrow. On my credit cards, I pay between 15 per cent and 23 per cent interest. Funnily enough, the Chancellor hasn't been sounding off about that particular usury.
Shame, because if my disposable income wasn't going on card repayments, it would undoubtedly be keeping the retail sector afloat. Even though the Allied Irish Bank curbs my expenditure ever earlier in the month (as I approach my overdraft limit) I do my little bit.
Much of it is spending to save money. Only this morning, I purchased three grouse (a friend is coming to dinner) at a tenner each on the grounds that this was, oh, half as much as it would cost in Allen's of Mayfair.
Tomorrow, I will buy my boots for the season at £225 (in happier times it would have been twice that sum). That's a saving, too, because without them, much of my wardrobe will not work and cannot be worn.
Even in charity shops, where the thrifty consumer hangs out these days, I revert to type. I spent 80 quid in the Red Cross shop the other day on I can't quite remember what, except that it included something by Yves St Laurent in emerald green. That didn't quite count as spending either - more as charitable giving and a bargain with it. You can take the shopper out of Harvey Nichols, but you can't take Harvey Nichols out of the shopper.
Nowadays I feel like a drinker in the dark days of Prohibition. But inexorable reality isn't far off. As Mr Micawber observed: "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."
It's true, now, as then. But it'll be a sorry look out for the economy when the likes of me live within our means.
Reader views (3)
Metropolitan Melanie, lucky you with 6 credit cards, but pity the savers (the true funders of your handbags, designer shoes, drink, food, etc etc splurging); those who get diddly on their money from the lenders that you exalt to the skies.
- Ted, London, 03/09/2009 15:00
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Spending Sprees...'Just to keep the UK economy going...!" That is the voodoo economics of Mr Broone's 'Seseme Street' approach to the UK recession. It would be better for people to pay off their personal debt first, even if that takes another 3,4 or 5 years.
Maybe the economics of Dickens, Mr Micawber - Income One Pound. Expenditure 19 Shillings and 6 Pence. Results - 'nae Bailiffs knocking on the door!!'
- Uncle Vanya, East Anglia Area UK, 03/09/2009 13:23
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Crikey, if only MORE women had spent/borrowed MORE to luxuriate themselves on these neccessities instead of bigger cars, larger houses, leather sofas, endless decorating, Plasmas, gold -tapped kitchens, bedroom furniture, holidays abroad and so on, then we would NEVER have gotten into this sorry mess, would we?
It’s interesting, isn’t it, that many "economists" have used headlines like "worst slump since`29"
You highlight the difference admirably, Melanie, not spend spend spend on food, heating or keeping a roof over your head, but spend spend spend on modern women’s necessities, like fashion shoes (don`t those 5 inch heels break easily?), carpets (as opposed to carpet cleaner and elbow grease), paint (wall cleaner and elbow grease), and of course, decorators (as opposed to personal effort and elbow grease).
Of course, you can drive these grovelling salesmen to the brink of a fantastic discount for you - and, like Woolies` staff, they can celebrate all the way to the jobcentre.
Decadent Credit Crunch Britain, uh?
- Darius, London UK, 03/09/2009 10:35
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