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Fear not: you've got more money than you think!

The UK may be on the brink of recession – but Kent families shouldn’t panic.

In fact, we have more money in our pockets than we think, according to one county expert.

The office of National Statistics today announced the UK economy grew only 0.2 per cent during the second financial quarter for this year.

This brings the average annual growth in the economy down from 2.3 per cent to 1.6 per cent, the biggest drop since 1995.

However, a Kent expert said the majority of people are in a far better financial situation than they think, and should be prepared to tighten their belts rather than complain about losing some of their disposable income.

What is a recession?

A recession is declared if the economy – i.e. the total amount of goods and services produced by the UK - drops for two successive financial quarters (six months)

A mild recession sees the economy quickly recover after two bad quarters, but a full-blown recession occurs when the economy continues to contract year on year.

The last UK recession was in 1991, when economic growth fell 1.4 per cent compared to the previous year.

Professor of economics at the University of Kent, Jagjit Chadha, said: “People have come to expect their income to rise by two to three per cent a year, but now their disposable income is being eroded.

“Having less to spend makes people feel worse off, but they are much better than they realise.

“Incomes have actually tripled in recent years, and the economy has grown consistently since the mid 1990s.

“There are always going to be people who have over-borrowed and will have difficulty adjusting. But the average person isn’t going to be badly affected.

“People really have to ride it out if they want things to get better – they need to accept a reduction in their disposable income, and not start over-borrowing and getting into further debt.”

The current slowdown in the market is thought to have been driven in part by rising unemployment in the construction sector, which accounts for six per cent of the economy, as house prices remain unsteady.

The increasing price of oil and food is also eating into people’s spending, and it is hoped a cut in interest rates will help soften the rising cost of living.

Professor Chadha added that people should not get overexcited about the drop in the housing market, as prices had been overvalued by around 20 to 30 per cent and should adjust down accordingly.

He added: “I would only start to worry if we started to see house repossessions and employment figures rise significantly.

“The average person has a level of debt that is manageable, providing an income keeps coming in.”

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