Upon hearing the news that the UK fell into recession towards the end of 2023, many people are understandably anxious, including our valued members and our staff. After all, recession – defined as ‘a fall in gross domestic product (GDP) across two consecutive three-month periods’ – invariably introduces a wave of uncertainty, particularly around financial stability.
According to the news, the recession came about as a result of the UK economy shrinking by a sizable 0.3%. This followed previous reductions between July and September, while the annual growth for 2023 stood at a mere 0.1%.
While this may seem bleak, people may be reassured by the fact that economic downturns actually create an environment in which it becomes possible to reassess and adapt our financial strategies, so there are some causes for optimism.
A recession will almost certainly make people worry about their personal finances, with the struggling economy increasing the prospect of tighter personal budgets, job uncertainties and falling incomes.
Unfortunately, the looming shadow of inflation is unlikely to put anyone’s mind at rest either.
As the Bank of England lifted interest rates to tame inflation, the pace of price rises stood at an alarming 4% in January – double the bank’s 2% target. For personal finances, this indicates a potential reduction in purchasing power, affecting everything from daily expenses to significant outlays such as mortgages and loans.
As your credit union, we understand the concerns of our members.
Our role is to help you navigate and weather this financial storm and we believe that providing guidance and tailored services to safeguard your financial health during these tough times are just a couple of the ways in which we can do so.
Rest assured, we are developing strategies to meet the potential challenges that lie ahead. These include:
We are dedicated to helping our members adapt to fluctuations in their income and increasing prices. We understand the importance of reviewing and revising budgeting strategies, prioritising financial obligations and considering flexible repayment options.
As we tackle this recession head-on, we remain unwavering in our commitment to remain a reliable financial partner to our members.
Some good news.
While the economic terrain may appear challenging, it’s worth noting that this particular recession has been described by Ruth Gregory, the Deputy Chief UK Economist at Capital Economics, as: “as mild as they come”.
For any LCU members struggling with their finances, we urge you to maintain open communication with us. Our dedicated team is ready and available to provide support and practical insights based on your individual circumstances and, more than ever, let’s remember that the essence of Leeds Credit Union is the principle of unity: members saving together and lending to each other at an affordable interest rate.
With collective effort, thoughtful strategies and resilience, we can emerge from this stronger and more financially robust than before.