Credit squeeze appears to be loosening
Employers' lobbying organisation the CBI has said that it believes the negative credit conditions that have helped to stoke the economic slowdown are set to stabilise in the months ahead, as businesses become slightly more optimistic about the supply of new and existing credit.
In its latest Access to Finance survey (May this year), the CBI reported that only 7% of the firms surveyed expect a further decline in the supply of new credit in the next three months. In addition, small and medium-sized firms (with up to 249 employees) expect no further decline in the supply of new credit, while very large businesses (with over 5,000 employees) are predicting a slight improvement in existing credit.
According to the CBI's Chief Economic Adviser Ian McCafferty, "Credit availability is still a concern, but the severity of the situation is easing compared with a few months ago."
A report in late May by the British Chamber of Commerce (BCC) also highlighted an atmosphere of improved optimism, suggesting that 30% of those surveyed expect their turnover to increase in the following quarter by between 1 and 25%, up from 22% three months earlier. On a less positive note, however, the same report showed that half are experiencing longer payment times by their customers, suggesting that businesses are continuing to face trading difficulties.
Contact
Judith Ellery Head of Employment
Bethan Southcombe Solicitor
Related Issues
This article summarises the law on issues which we believe may be of interest to your business. It is not a comprehensive review of the subjects and accordingly is published without responsibility for loss occasioned to any person(s) acting or refraining from action as a result of information published. This document is provided for information only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.