Downing Street must add the likelihood of a UK recession to its list of possible scenarios after official figures showed that the economy contracted in the second quarter by 0.2%…
…UK companies have been borrowing heavily since the 2008 crash. Most of the funds have been used to pay generous dividends, rather than being ploughed into new equipment or research and development.
According to analysis of industrial companies by US risk assessment company Credit Benchmark, British firms have allowed their financial situation to deteriorate to such an extent that they are much more vulnerable to a shock than their peers in Europe or the US.
Credit Benchmark’s risk indicator shows that EU companies, acting prudently to shore up their finances, have cut their borrowing since 2016 to the extent that their credit risk has improved by 10%. Over the same period, UK industrial companies have allowed their credit risk to deteriorate by 25%.
The Observer cites Credit Benchmark data in this opinion piece on the the weakening state of UK Industrial companies in the lead up to Brexit.
The Observer, August 11, 2019.
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