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Personal Debt
In this interview, Eric Pennies is talking Morgan Brooks about personal debt, and how this is affecting the British economy.
Eric: In the studio today we have Morgan Brooks from Stansley Banking Systems who will be talking to me about personal debt. We ’ ve probably all have had a period of debt in our lives, but I understand things are worse than right now. Is that right
Morgan: Well , this week the bank will release figures on levels of outstanding debt that were recorded in April. These will show the figure is close to one trillion pounds. That’s one thousand billion pounds. The shadow chancellor Vincent Cable, warned earlier this year that personal borrowings were heading for 1 trillion.
Eric: So , how do people get into this situation?
Morgan: Well, most of the personal debt comes from mortgages as well as credit cards and personal loans. However at this rate, personal debt will continue to increase to roughly 17 thousand pounds for every man, woman and child in the UK. These figures are bound to cause more concern over the level of debt.
Eric: So how can we deal with it?
Morgan: Well, the Liberal Democrat shadow chancellor, Vincent Cable, says the government should undertake a 10 point program to tackle these record levels of personal borrowing.
Eric: What would that include?
Morgan: Well this would include things like the government monitoring the sustainable level of household debt . Guidance to banks on safe levels of debt for individuals. And curbs on credit promotions. Mr Cable said that even the interest we pay on the debt, which is more than 6 billion pounds every month, is even beyond comprehension.
Eric: So what about the future?
Morgan: If interest rates continue, er, to increase as expected, and house prices fall; if oil prices continue to go up and inflation rises, many people could find themselves in difficulty. Even if we as consumers can recognise that we’re borrowing too much, it is not in the government’s interest to return to a boom and bust economy. Sometimes people have to be made to save for themselves.
Eric: OK thank you Mr. Brooks that was really interesting. Erm, Morgan, Morgan, you haven’t got, you couldn’t lend me a bit of cash could you? I’ve left my wallet at home.
Morgan: I’m a bit short myself, mate.
Glossary
personal debt n the money we have to pay to the bank, or other financial organisations. Money we have borrowed
to release vb to tell the public about some information
a figure n a number
outstanding debt n money that you owe
the shadow chancellor n the “chancellor” is the government minister in charge of financial affairs. The “shadow chancellor” is the member of the opposition who is in charge of financial affairs
personal borrowings n money that we borrow. Later we pay back this money with interest
to head for phr vb to move in the direction of
a mortgage n money that the bank lends you so you can buy a house
at this rate exp at this speed; at this rhythm
roughly adv more or less
are bound to exp are going to; will definitely
concern adj worry
to deal with phr vb to try to find a solution to a problem
to tackle vb to try to find a solution to something
to monitor vb to analyse and observe
a sustainable level n a level that can continue to exist
household debt n money that each family owes to the bank
guidance n help, advice
to curb vb to stop
to go up phr vb to increase
to rise vb to increase
a boom and bust economy exp an economy that increases and decreases very quickly
to save vb to reserve money so you can spend it later
cash n money in coins and notes
a wallet n an object you use to keep money and cards in
short adj if you are ‘’short’’ you don’t have a lot of money with you
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