Consumers are no longer in shock about living in a recession.  Instead they are accepting the situation and are deciding to ride out the storm and end up in a good position once the clouds clear out.  Households that were once pushed into renting are now choosing rental homes as a way to avoid major debt despite low interest rates.  Homeowners are grabbing low interest rate remortgages to carry them for the next few years even if the Bank increases the standard base interest rate.

Consumers have lost spending power as inflation has risen above the Bank’s goal of 2.0 per cent to 4.4 per cent.  Unemployment has risen and the current situation in the Eurozone has many worried.  Yet, consumers are remaining steady and preparing for the worse and hoping for the best.  They are making long term decisions versus short term and are paying off debt and making smart spending decisions.  No one expects the economy to be get a quick fix anymore.  Hopefully educated consumers are emerging from the recession more cautious and more responsible for their future.

Howard Archer, chief UK and European economist at IHS Global Insight, remarked on borrowing saying "Consumers' desire to get a tighter grip on their finances is the consequence of current very low and falling consumer confidence, which reflects heightened concern over the outlook for the economy and jobs.

"It is likely, though, that some people are having to borrow more to help finance their spending due to the extended squeeze on their purchasing power coming from high inflation, low wage growth and tighter fiscal policy."