'Depleted savings, credit card debt leave economy on last legs'

Maxed-out credit cards together with household savings at a 20-year low are alarming portents for the looming recession, says turnaround specialist Michael Fingland. The founder and CEO of Vantage Performance said the increased costs of servicing a mortgage had depleted cash built up during the pandemic and it was business as usual for credit card debt. "Inflation is coming down because the household savings rate is now at such a low level," he said on the latest Accountants Daily podcast. "Also through Covid the average credit card balance dropped by a third … it's just tipped back up at the end of the June quarter, back up to the peak of where it was pre-Covid." "The economy, in terms of discretionary spending, is now exhausting itself." "Look at the US and Europe – when you go into a recession with a very low household savings rate the recession is worse because there's just no buffer."