Recession `very likely` during 2008

A recession is "very likely" to happen during 2008, which may affect British consumers with personal loans, an industry expert has claimed.

The lack of credit availability, housing slowdown and recent downturn in the stock markets are all incidents that may speed up the timing of a recession, Fool.co.uk stated.

As a result, the Bank of England "will" cut interest rates in February - affecting personal loans - following in the footsteps of the US Federal Reserve, David Kuo, head of personal finance at Fool.co.uk, said.

Mr Kuo added: "About two-thirds of the economy is based on consumer spending and if consumers cannot spend money - either because they haven`t got it, or can`t get hold of it - then that is the reason why we will have a recessionary situation here in the UK."

According to Nationwide, there has been a dip in consumer confidence in the wake of the credit squeeze.

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