Blow to economic recovery hopes could see debt management issues continue

Hopes of a third quarter economic recovery were trashed yesterday after official figures showed that industrial output suffered a sharp dip in August.

Figures from the Office for National Statistics show that production during August dropped by 1.9 per cent, meaning that manufacturing output was flat on a three-month-on-three-month basis.

This may present yet another blow to Britons struggling to manage their credit card debt - a problem which may persist for some time while the economic downturn continues and could see more consumers turning to high interest borrowing.

Benjamin Williamson, economist at the Centre for Economic and Business Research, said that he, like many others, was "surprised" by the findings.

He added: "It has just made the whole situation a lot more realistic. People had been expecting, erroneously in our opinion, that there would be a strong bounce back."