£535m cost of credit crunch

The credit crunch has cost Shropshire and Mid Wales more than £535 million since it began a year ago today.

Families across the region are paying out an average of £2,185 extra a year since August 9, 2007, when the credit crunch officially started.

The colossal figure, revealed by a Shropshire Star investigation, includes soaring household bills and rocketing prices for essentials including food and fuel.

Today marks the anniversary of the beginning of the global financial turmoil which first hit the American mortgage market but is now having an impact on the lives of ordinary families across the UK.

Nick Graham, Shropshire Chamber of Commerce chief executive, described the figure as “staggering”.

“On a household basis, the numbers stack up and are quite staggering,” he said. “It shows why consumer confidence is so low.

“When you break it down, it’s clearly a good indicator of the level of spend which is being ploughed into essentials and therefore diverted away from the other sectors of the economy, like retail.”

With staple food costs rising by an average of 12 per cent in the last year, the average annual cost for a family supermarket shop has gone up by more than £750.

The average mortgage repayment has gone up by around £82 a month, making a yearly total of £984 on a £150,000 mortgage on a two-year fixed rate.

With the rising price of oil, motoring organisation the AA says the average two-car family is now paying out an average of £176 extra a year to fill up, while bills for gas and electricity have risen by £264 on average.

Added together, this means the credit crunch is costing the 244,900 households across Shropshire and Mid Wales more than half a billion pounds. In Shropshire alone, the cost is £417 million.

Phil Wood, managing director of accountancy group Barringtons, which has offices in Market Drayton and Newport, said his firm was dealing with an increasing number of inquiries from people facing debts as they struggled against rising bills.

“The figure is about £40 a week,” he said.

By Business Editor Amy Bould