United Kingdom23 Mar 2012
During the 1960s the United Kingdom (UK) was the first European country to introduce leasing, in its modern format, from the United States. Since then UK lessors have further developed and refined the product to the extent that potential borrowers have come to expect a reliable, mature platform of tailored finance products when they require them. And as 2012 progresses and the country emerges from recession, it seems that they are starting to require them again. The United Kingdom Asset Finance Country Survey reveals all the inherent strengths (and weaknesses) of the UK’s asset finance industry.
The Bank of England’s most recent quarterly inflation report, issued in mid-February, forecast that the UK economy will grow by around 1% in 2012, although it will “zigzag” in and out of growth in the process. Inflation is predicted to gradually fall, with the Bank indicating it may fall below 2% in the fourth quarter.
Naturally, worries about the ongoing eurozone crisis have affected business confidence. The Q4 2011 Grant Thornton International Business Report showed optimism among UK companies for the economy over the next 12 months at -35%, compared to -17% for the EU and +1% for the US. However, there is renewed confidence from the US and evidence that the global economy has avoided the worst of the recession, and this sentiment is filtering through
The February 2012 economic forecast from UK business organization, the Confederation of British Industry (CBI), states: “Growth will restart in 2012, but high levels of uncertainty around the economic outlook, mainly driven by the situation in the euro area, mean growth will remain subdued, particularly in the first half of this year.
The CBI predicts growth of 0.9% in 2012, and 2.0% in 2013. Net trade and business investment will contribute most to growth, with a rise in exports of 4.3% in 2012 and 6.4% in 2013. The CBI’s forecast is for total business investment of 4.3% for 2012 and 5.0% for 2013. Ian McCafferty, CBI chief economic adviser, says: “After a particularly difficult autumn which saw a contraction in growth in the fourth quarter, recent business survey data in manufacturing and professional services has been more encouraging, with an uptick in activity and improved business sentiment.”