Coming out of recession: the impact on enforcement
by David Carter on 22 December 2009
The CBI expects the UK economy to exit the recession in the fourth quarter of 2009 when UK growth resumes in the fourth quarter of this year (0.5% quarter-on-quarter), helped by consumers bringing their spending forward to beat the VAT rise.
Here are their headline forecasts:
- Growth will be slow in the first half of 2010, but strengthening through the second half and 2011 as the global economic recovery gathers pace, businesses rebuild stocks and household spending recovers. Growth in the range of 0.5% to 0.7% is expected to be maintained through to the end of 2011.
- Unemployment is expected to continue rising over the coming quarters, but peaking slightly lower than previously forecast, at just over 2.8m in 2010 Q3. And after very constrained wage growth during 2009 and 2010, average earnings are expected to rise somewhat faster over 2011, at 3.9%.
- The planned VAT rise in January will push CPI inflation up sharply before it eases back during 2010 and falls below the Bank of England's 2% target throughout 2011. Oil prices are expected to rise continually over the coming two years, as the global economy recovers with a relatively limited oil supply, hitting almost $100 per barrel at the end of 2011.
- Credit conditions will remain difficult as the banks slowly nurse themselves back to health, consumer spending will be shaped by the need to rebuild savings, and the public sector will soon have to tighten its belt.
- Business investment, which has fallen heavily throughout 2009, should start to recover in the spring of 2010 but is likely to remain hindered by excess capacity, weak demand, and credit supply issues.
In terms of credit management and subsequent enforcement, I believe we can still expect late payment and failing businesses in 2010, as well as ongoing defaults by individual customers.
While I really sympathise with those struggling to pay their debts, it is important to ensure that late payers don’t jeopardise our own businesses. Vigilance in credit control and prompt enforcement action will still be very important in the next couple of years.
I welcome the news that we are coming out of recession and wish all our clients a prosperous 2010.
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Disclaimer: The statements and opinions expressed in this article are those of the author and do not necessarily reflect those of Sheriffs High Court Enforcement Ltd, trading as The Sheriffs Office. Sheriffs High Court Enforcement Ltd does not take any responsibility for the views of the author. The author will not be held responsible for any comments posted by visitors to this site. Please note that this article does not constitute legal advice. The author has used his best endeavours to make this article as accurate and complete as possible, but requests that the reader be aware that the law of England and Wales frequently changes. The author strongly advises the reader to take legal advice before embarking on any enforcement action.
