Economic and market outlook: Running Up The Hill
Global growth is entering a soft patch this year as uncertainty due to geopolitical risks remains high. We expect global GDP growth at +2.9% this year and +2.5% in 2023, down by -0.4pp and -0.3pp compared to our last forecast in March.
A Recession to Avoid Stagflation? The World Economy at a Crossroads
Four months after the start of hostilities in Ukraine, the first lessons can be drawn. The conflict, which is set to last, has already upset the global geo-economic balance. Our latest barometer explores the economic impact around the world and in different industries.
Read the barometer here.
A challenging year for UK businesses
Supply chain disruption will ease in the second half of 2022, but challenges for UK businesses remain – including higher energy costs, increasing interest rates, and the ongoing impact of Brexit – Allianz Trade experts warn. I sat down with Ana Boata, Allianz Trade’s Head of Economic Research, to discuss how the global economic environment will affect UK firms, and the results of the Allianz Trade Global Survey 2022.
Risks and opportunities: a mid-year update
With the economic outlook deteriorating, 2022 will be more challenging than expected for many businesses in the UK and Ireland. Cash flow is under pressure as costs rise, and many firms are still wrestling with disrupted supply chains. I talked to Mike Buggy, newly appointed Head of Risk Underwriting in the UK and Ireland, to discuss the current state of play, and our key priorities for the rest of 2022.
Read the interview
Please see below a UK Market Update from Duncan Hanwell, Director of Hanwell Atkinson.
UK market update
Atradius summarise the key points from the Spring Budget 2022.
The UK had the highest growth rate in the G7 last year, but the cost of living crisis, combined with global uncertainty, could have a significant impact over the next few years.
- UK growth is now expected to be 3.8% for 2022, 1.8% in 2023 and 2.1% in 2024.
- Unemployment in the UK is now lower than it was pre-pandemic.
- Inflation in February was 6.2% and is likely to rise to 7.4% over the course of the year.
- National debt is falling and expected to continue to fall to 79.8% of GDP by 2026-27.
- Borrowing is now forecast to be lower than expected at 5.4% of GDP in 2022, 3.9% in 2023 and 1.2% in 2024.
- Household support fund will be doubled to £1bn to help most vulnerable households with rising costs.
Today’s statement set out a roadmap for businesses, with more detail to follow in the Autumn Budget.
- Possible reforms to R&D credits from the autumn, to support businesses to increase vocational skills in the workforce.
- Cuts to tax rates on business investment from the autumn.
- Employment allowance increasing from April to £5,000.
Rising energy prices will continue to have a huge impact on cost of living, with some measures announced to soften the blow for lower income families.
- Fuel duty will be decreased by 5p a litre effective from today until March 2023 to support motorists.
- Homeowners will pay 0% VAT on energy saving materials for their homes, such as solar panels or heat pumps, for next five years.
- There will be no change to the energy cost rebate, support stands at £9bn which is expected to help 28m households pay around half of the increase in energy costs.
Tax and Levies
This budget announced several key tax cuts and changes to tax thresholds for lower- and middle-income families.
- The National Insurance threshold will increase to £12,570 from July 2022 in the largest single personal tax cut in a decade.’Draught relief’ introduces a lower rate of duty on draft beer and scraps the ‘irrational duty premium’ of 28% for sparkling wines
- Income tax will be cut before the end of this Parliament in 2024 from 20p to 19p on the pound
The focus of the budget aims to deliver a stronger, more secure UK economy with more resilient public finances by helping families with the cost of living, creating conditions for higher growth and sharing the proceeds of growth fairly. However, the rising cost of living, and ongoing global uncertainty will have a significant impact on individuals and businesses over the coming years.
Atradius offer their advice and answer FAQs about their cost coverage.
We want to help you provide the best service and advice to your customers. The below advice offers the key answers to some Frequently Asked Question regarding cost coverage.
How does contribution to collection costs work?
When you place a case with Atradius Collections, the claims examiner will run a preliminary cost assessment to determine the coverage percentage. This will be confirmed in writing to you around 5 days after placing the file. Once a fee is raised and invoiced the claims department will attribute their coverage.
You will receive a three page invoice which includes details of the original costs from Atradius Collections, a covering letter confirming the amount the policy contributed and the amount you are being asked to pay.
If you have any questions on receipt of an invoice please contact the Customer Service Team on 03306780221 who will be able to assist you.
What happens if a case is disputed?
Costs incurred to resolve a dispute are not covered by the credit insurance policy. On receipt of a dispute from a buyer, we will advise the claims examiner. This usually leads to the liability being deferred and costs coverage being set to zero. You will have the opportunity to close the file at this stage, however if you chose to keep the file with Atradius Collections our tariff below will apply.
Once there is an accepted debt or a final judgment in your favour the claims examiner will review the contribution and may cover the costs going forward from that date.
What happens if you have some uninsured debts that that are not covered by your policy?
We would be more than happy to assist you with your past due debt whether the buyer is covered or not. The collection rates remain the same regardless of coverage. The only difference would be that the collections fee would not covered by your policy and you would be invoiced for our fee.
Download our Welcome Pack and dispute advice below for more FAQs!
Studio Retail Group has become a casualty of the supply chain crisis, as it calls in administrators.
A notice of intent has been filed to the courts with proposed administrators, Teneo, expected to be confirmed in the next 7-10 days. Company shares have already been suspended and its transactional website is not currently taking orders.
The administration process: a quick guide
Creditors of the company can expect to receive a formal notification of the appointment of the Administrator.
In many instances the trade and assets of the insolvent company may be sold and a new company established. There is often a change of name for the old company if this happens. This new company will continue to trade often with the same brand name and premises. The new company is not liable for the debts of the old failed business. The insolvent business will be managed by an administrator.
The Administration process for the failed business will normally run for 12 months. At this point the company is likely to pass into Creditors Voluntary Liquidation; this is a frequently used vehicle for the distribution of dividends. There are other options to exit Administration, but Creditors Voluntary Liquidation is the most regularly used.
The Administration process can be extended, however the Administrator would need to apply to the Court for approval to do so.
At approximately 8 -10 weeks from appointment, the Administrator will issue a statement of affairs (usually including the creditors list) and their proposals for dealing with the Administration.
Insolvency rules mean that most communications are published electronically and so you should be alert to the fact that the Administrator’s website will be updated, also you should note that creditors’ meetings are now infrequent. However, you will be alerted to the publication of the Administrator’s proposals, where you will be able to access a proxy form for voting.
We hope you find this update useful and if you believe that you have a valid credit insurance claim upon Atradius, we would ask that you notify us immediately by lodging a notification of non-payment.
No sector has been left untouched by Covid, but within the food sector, that impact (both negative and positive) has been as varied as the business models operated. Some have generative large profits, while others have slipped into loss-making territory.
The UK business outlook for 2022 shows the economy bouncing back. But Euler Hermes Global Head of Macroeconomic and Sector Research, warns firms to watch out for a number of risks.
Read the latest insight!
Food & Beverage Update: October 2021
In this update from Nexus, their food & beverage expert, Victoria Bond, discusses the road out of lockdown and recent mergers and acquisitions.
Click here to read more