Insolvency and losses 'to rise as Brexit kicks in'
A credit management seminar in Belfast has heard that it is likely that there will be an increased level of company insolvencies and losses as credit risks are "exacerbated by Brexit".
Nigel Birney, head of trade credit and political risk for NI with the Trade Credit Brokers, issued the warning at a Chartered Institute of Credit Management event.
"Business in the UK is likely to see an increased level of insolvency, losses and projects put on hold as trade credit risks are exacerbated by Brexit," he said.
"Getting paid on time and getting paid what you expect to get paid when you enter into a contract can be difficult at the best of times, however, with the added complexity of our future relationship with the EU still unknown, a plan needs to be put in place.
"Brexit negotiations have now kicked off and we should expect to see increased apprehension as businesses try to stay ahead of the game and ensure that there is as little risk to their day to day trading as possible.
"A key component of that plan should be trade credit, which provides an opportunity for continued growth in uncertain times."
Mr Birney said the rise in demand for credit insurance has been significant as the economic uncertainty triggered by the UK's EU exit has started to take hold.
"Credit insurance provides vital protection to businesses against the impact of bad debt caused by the failure of customers to pay for goods or services sold on credit, and is now an essential component for businesses seeking to manage risk proactively," he said.
Earlier this week Bank of England Governor Mark Carney said that "now is not yet the time to begin that adjustment", while wages continue to stagnate and the impact of Brexit on the economy is unclear.
And yesterday's the Bank's chief economist Andy Haldane poured cold water on the prospect of an immediate interest rate hike.