The effects of the credit crunch have had a huge impact on the economy of the UK, leading to one of the worst recessions the country has ever experienced and although we are starting to see some early signs of recovery, particularly in the housing and home owner loan markets, Britain is still in recession according to the figures for the three months leading up to the end of September, despite the fact that many of our neighbours in Europe are now officially out of recession and beginning to see real growth in their economies once again.

In March this year, the Bank of England lowered the base rate of interest to just 0.5 per cent, the lowest in the history of the Bank and although some people are talking about an increase in interest rates next year, one expert claims that they must remain low in order for the economy to recover and for individuals with loans and other personal debt to be able to continue to manage their finances.

Charles Davis of the centre for economics and business research has said that it is essential that interest rates remain at their current low level for the foreseeable future.

Mr Davis also commented that the reason why the UK is still in recession when many other countries in the European Union are now seeing growth again, is largely due to the level of borrowing. Individuals in the UK have much higher personal debt levels on loans and credit cards than they do in Europe, which has slowed any recovery in our own economy, due to the fact that many people are focusing their attention on repaying their personal loans and other debts, rather than spending money on the high street. Low interest rates will mean cheaper loans and therefore make it easier for individuals to repay their debts.