SOUTH west Hertfordshire is likely to become one of the country’s biggest losers in the current financial crisis, a study has found.

The report, by Oxford University, investigated what affect the credit crunch is having on local economies across the UK and what is likely to happen in the future.

It found the borough of Watford is already suffering heavily from the economic downturn, ranking it as the 14th most severely hit out of 408 boroughs.

Furthermore, Watford was ranked just one place below Three Rivers – which was rated as the 13th hardest hit area – meaning south west Hertfordshire can claim to be one of the most severely affected places in the UK.

Neighbouring authority St Albans was also ranked as the 16th worst hit area.

The study compared a range of factors, including regional unemployment rates, average earnings, disposable income per head and house prices in every local authority in the country.

Factors, including high house prices, large numbers of people working in the financial industry and large credit card debts, are all likely to take a considerable toll on the area.

Last month we revealed twice as many people are now having their homes repossessed in Watford.

Between April and June this year 254 debt-ridden families lost their home in the town – a rise of 47 per cent when compared to the same 12 weeks in 2007.

Watford has seen the sharpest rise in repossessions out of any town in Hertfordshire, Bedfordshire and Essex.

Kulat Rajuraj, manager of the Bushey Post Office, believes people have begun to cut back on luxury purchases.

“We have seen a big fall in sales of chocolate and slight falls in the sale of things like lottery tickets and scratch cards.

“It’s a little too early to tell yet how bad things might get.

“We are selling more newspapers than normal as people seem to want to keep up to date with what is going on and what might happen in the future. We are selling more copies of the Financial Times now than anything else.”

As house prices tumble, banks teeter on the brink of collapse and recession looms, home owners, it seems, are not the only ones struggling to understand the cause of the biggest financial crisis since the Great Depression.