Debt in Australia: household finances improving

According to research by the Melbourne Institute, Australian households` finances are much better now than they were three months ago, news.com.au reports.

The Institute found that 47% of Australian households found they were able to save part of their income (a slight increase on three months earlier), and there were fewer households running into debt and/or using up their savings.

The research also found that households from New South Wales were more likely to get into debt, and that households in Victoria were more likely to `make ends meet`.

The improvement of household finances in Australia could influence what the future may hold for the UK - in a speech to the Treasury Select Committee, Mervyn King, the Governor of the Bank of England, commented that `the state of the banking system, levels of debt, and the global economy` are all slowing the pace of the recovery, The BBC reports.

A debt expert for Think Money added: "It is important to pay attention to what happens in other countries. Changes in the global economy will have an effect on the UK economy, and by looking at the way other countries are coping with the recession, debt, and so on, we may be able to get some clues as to what we can expect here in the UK."