Banking jobs in London ''set to write off plenty of debt''

The economic outlook for 2011 does not look altogether positive, according to one sector commentator.

Ed Bowsher, head of consumer finance at lovemoney.com, said that people with banking jobs in London could find themselves writing off plenty of personal debt in the next year as unemployment rises.

"The only options [for people losing their jobs] will be bankruptcy or measures such as an IVA (Individual Voluntary Arrangement) where banks have to accept they’re not going to get all their money back," he warned.

However, Mr Bowsher continued that the financial crisis has made many people think differently about debt, with more now likely to see it as a "huge albatross".

Such feeling may have prompted increasing numbers of Britons to take steps to pay off their loans.

But he added that the Office of Budget Responsibility (OBR) has predicted a significant increase in household debt, which may happen if interest rates are put up and people find it harder to pay back loans.

The OBR has warned that household debt could reach £1,823 billion by the end of 2015.