Coface gives vote of confidence to UK at conference to promote safer trading
The UK is becoming a better place to do business according to Coface, which is upgrading its country risk assessment in the light of positive economic indicators and payment experience in the UK. The experts in credit management and trading risk analysis announced the decision at their annual Country Risk Conference in London on Thursday 5 June 2014 although Coface warned that levels of private and public debt are still too high.
After placing a positive watch on the UK in April this year, Coface has now issued a new country risk assessment of A21. Coface now forecasts UK economic growth of 2.7% in 2014 and 2.1% in 2015 and while much of this has been driven by consumer consumption, the company believes investment in manufacturing is reviving and this will provide a second engine for growth over the next two years. Coface also notes the Bank of England’s effort to prevent a property bubble by ending the funding for lending for mortgage loans and refocusing the scheme on business finance.
Coface’s Chief Economist, Yves Zlotowski, commented: “The UK recovery is broadening out and British corporates are getting stronger. The improvement of the UK’s country risk is in line with a global rebalancing of risks in favour of advanced economies. After the upgrade of Ireland to A3 in January 2014 and of the USA to A1 in April 2014, this is the third positive change in the assessment of an important economy, which has been hurt by the crisis but is now seeing an improvement in UK corporates’ ability to pay”.
Coface UK & Ireland’s Head of Risk Underwriting, Grant Williams, added: “We have seen a general downward trend in UK payment incidents and there are reasons for optimism. However, there is the traditional risk of overtrading during an economic recovery which can leave companies dangerously exposed, and we have already seen an increase in default rates for small businesses during the first quarter of 2014. For this reason, we would urge businesses not to allow their confidence to overcome their caution. Coface can work with companies to manage the risk of trading domestically and overseas with a range of services, including business information, credit insurance and debt collection.”
Coface UK & Ireland’s annual Country Risk Conference was held at the British Library in central London. In addition to Yves Zlotowski and Grant Williams, other speakers at the morning event included:
- Dr Robin Niblett, Director, Chatham Houselooked at how Continental Europe is recovering from recession and the implications for trade.
- Dr Andrew Sentance CBE, Senior Economic Adviser, PwCconsidered whether the UK economic recovery is sustainable and assessed the influence of the financial services sector.
- Sam Wilkin, Head of Business Research, Oxford Economicsexamined the geopolitical trends and opportunities which are currently shaping global trade, including the repercussions of the Ukraine crisis.
- Stephen Reitman, Automobile Equity Analyst, Société Généralepresented the key issues within the automotive sector, its impact on other industries and the significance of the Chinese market.