The very British problem: Spend now and pay never


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It seems I’ve become a naive country bumpkin since leaving London six years ago.

There I was last Friday in central London, looking for a table for two at any restaurant within twenty minutes of Oxford Street.

But there was nothing, not a hope in hell of finding any decent food of any cuisine for that matter. London was rammo, the pubs and bars were rammo.

Everywhere I look, people I know and come across are spending money like it’s going out of fashion, which is ironic because at work all I hear is that sterling is completely out of fashion due to the imminent economic collapse on the back of Brexit.

All of which leads me to the conclusion that it’s possibly not Brexit at all that’s going to sink the UK economy. It’s more likely to be the fact that as a nation we are collectively drowning in debt, revving up the credit card bills, while saving is at the worst levels on record.

If you listen to many pundits on CNBC, it seems that people are pulling out their flexible friend just to pay utilities bills and survive. It’s also the case that our obsession with consumption here and now is fuelling the trends even more.

I understand how hard it’s going to be for the millennials to save for a mortgage, put money into their pensions, and pay off student debt. It looks daunting, but is probably not helped by the apparent necessity of upgrading to the latest iPhone today at horrendously high monthly subscription rates, or eating out every night on takeaways.

My generation, the forty-somethings that should know better, are just as bad. Most people I know drive a brand new or nearly new car. They don’t own it, they just drive it.

Nobody bothers saving any more. They just prefer to pay an extra seven per cent on a personal contract purchase, which means they pay an auto company seven per cent for the privilege of borrowing a car they will probably never pay off in full.

Saving is apparently pointless with pathetic QE-inspired interest rates. According to the ONS, UK savings fell to 1.7 per cent in the first quarter of 2017. The Germans incidentally still save at around 10 per cent, despite negative interest rates over at the ECB.

This is the time bomb and everyone knows it’s ticking, even if they are too busy in the pubs and restaurants – or the queue for the new iPhone – to acknowledge it.

With UK inflation providing a potential uptick in rates at some stage, how long before our “have it now and pay for it never” attitude comes home to haunt us?

I’ll wager before the oft-cited ill-effects of Brexit send us reeling.