Great Britain emerged from recession

Figures for the fourth quarter of 2009 confirm that, technically, United Kingdom has emerged from recession. Crédito y Caución expect that growth will be within 1.4% in 2010.
Madrid - 22-fev-2010

The initial estimate of a GDP contraction of 0.3% in the third quarter of 2009 was revised to show a more moderate decline of 0.2%. This slight improvement in outlook was predominantly due to better than expected performance by the construction industry. The fourth quarter of 2009 has confirmed this trend, showing a return to quarterly growth of 0.1%, confirming that the UK technically has emerged from recession. While this is good news, it needs to be kept in perspective: the forecast GDP is still 5% lower than when the UK entered recession.

In November 2009, UK retail sales rose by 1.8% on a like-for-like basis compared to the previous year, when sales had dropped 2.6%. In total, sales rose 4.1% against a 0.4% decline in November 2008. Early indicators suggest that the Christmas trading period saw consumers returning to the high street and many retailers are showing some strong results. However, the situation may change over the next few months as consumers lose the feel good factor of Christmas and the impact of the VAT increase, back from 15% to 17.5%, kicks in.

Net lending to businesses by UK-resident banks and building societies remained subdued in November, but was stronger than in preceding months. The rate of contraction of foreign bank lending eased in October on a three month annualised basis after its sharp deterioration since the financial crisis began.

In Q3 of 2009 there were 4,716 compulsory liquidations and creditors´ voluntary liquidations in England and Wales: a 14.6% increase year-on-year, but a 4.7% decrease compared to the previous quarter.

In November 2009 the Expected Default Frequency (EDF) indicator for the UK continued to decline. Over the last couple of months this has shown a degree of stabilisation, reflecting the significant improvement in the performance of the Financial Times Stock Exchange (FTSE) over the last 6 months. While this is clearly a positive sign, it should be noted that, compared to mid 2008, there is still some way to go to return to what was once considered as a normal position.

Unemployment growth predictions revised upwards

Predictions for growth in 2010 vary between 1.2% and 2.1%. Crédito y Caución expect that growth will be within 1.4% in 2010. Whichever forecast is correct, it is clear that it will be beyond 2010 before the UK makes up for the level of contraction seen over the last six quarters.

While Crédito y Caución is now able to see some more positive key indicators, history shows us that, when the UK comes out of recession, insolvencies and unemployment continue to rise for another 6-12 months. We expect insolvency figures to continue to stabilise in the last quarter of 2009, but it is still very likely that the HM Revenue and Customs Time to Pay scheme (allowing businesses to defer their VAT payments) will eventually have a negative impact on the future insolvency development. The many UK businesses that have deferred their VAT payments will need to start repaying these debts in Q1 and Q2 of 2010, adding further stress to their cash flow.

There is, however, some good news in that, back in Q3 of 2009, the Confederation of British Industry (CBI) predicted that unemployment would peak at more than 3 million in Q2 2010. Since then, unemployment figures have stabilised, with the quarterly increase in Q3 of 2009 the smallest since spring 2008. As a result, the CBI has revised its unemployment forecast downwards to peak at 2.8 million.

Mantenha-se informado. Receba a nossa Newsletter

Esta pagina web usa cookies

Utilizamos cookies de terceiros para fins analíticos (produzindo estatísticas baseadas nos seus hábitos de navegação), personalização (para lembrar o idioma ou as configurações preferidas da web) e publicidade comportamental (para desenvolver perfis e oferecer publicidade adaptada às suas preferências de navegação). Poderá configurar o uso desta tecnologia. Poderá também modificar ou retirar o seu consentimento a qualquer momento, clicando em "Declaração de Cookies".


Os cookies de marketing são utilizados para rastrear os visitantes dos sites. A intenção é exibir anúncios que sejam relevantes e atraentes para o utilizador individual e, por conseguinte, mais valiosos para os editores e anunciantes terceiros.


Os cookies necessários ajudam a tornar um site utilizável, ativando funções básicas como navegação na página e acesso a áreas seguras do site. O website não pode funcionar corretamente sem estes cookies.


Os cookies estatísticos ajudam os proprietários dos sítios Web a compreender como os visitantes interagem com o sítio Web, recolhendo e fornecendo informações de forma anónima.


Os cookies de preferências permitem que o site se lembre de informações que alteram a forma como o site se comporta ou é apresentado, tais como o seu idioma preferido ou a região em que se encontra.

Cookies de mapa

Os cookies de mapa permitem que a página salve informações sobre seleções no mapa