Recessions are as inevitable as anything else in life and with recent news that debt levels are once again spiralling out of control in the UK, it is only a matter of time before the next one arrives.
As a business owner you may well be having a better time of it than in the past. With the economy growing overall there may well be less chance of having to recover debt from customers and clients.
Recent reports from the Office of National statistics however make for sobering reading with household debt now reaching unprecedented levels and even businesses taking on more and more debt to fund themselves.
Household debt levels are bound to have an effect on the economy as time goes on, particularly as the level is expected to bottom out at 3% of GDP by the middle part of this year. Household debt hasn’t reached this level since records began in 1987 and even before that there has never been a time where the level of debt we are seeing now was taken on by households.
Rising debt has been largely fuelled by the availability of cheap credit which has offset low wage growth and helped people maintain a standard of living they have come to expect.
The important thing now as a business owner is to carefully monitor the credit worthiness of your clients and where debts are mounting, act quickly to ensure they are recovered.