Coface Group
United Kingdom

United Kingdom

Population 64.5 million
GDP per capita 45,729 US$
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major macro economic indicators

  2013 2014 2015  2016(f)
GDP growth (%) 1.9 3.1 2.2 1.2
Inflation (yearly average) (%) 2.6 1.5 0.0 0.8
Budget balance (% GDP) -5.7 -5.6 -4.2 -4.4
Current account balance (% GDP) -4.4 -4.7 -5.4 -5.9
Public debt (% GDP) 86.0 87.9 89.0 89.9


(f) Forecast


  • Oil and gas production covering three-quarters of energy needs
  • High-tech sectors (aeronautics. pharmaceuticals)
  • Low corporate tax


  • Uncertainties about consequences on the EU leave decision
  • Dependence of the economy on financial services
  • High levels of debt and public deficit
  • High level of private debt
Uncertainties related to “Brexit” will weigh on short term growth

Growth has been resilient during the first half. Nevertheless, on June 23th, the UK voted in favour of leaving the EU (52% has voted to leave. 48% to remain), calling into question the continuation of this trend. In the short term uncertainty and volatility are likely to prevail on financial markets. In this context consumer and business confidence has already deteriorated sharply, which could weigh on private consumption, moreover penalized in the future by the gradually increasing inflation (through the depreciation of the sterling against the dollar and the euro). Nonetheless, the “Brexit” shock will essentially impact private investment which has already shown weak performances since the beginning of the year. The lowering of interest rate by the Central bank (BoE) in August to 0.25% for the first time since 2009 and the bond purchase programme aim to prevent the expected activity slowdown. Moreover, this confidence shock might imply a price correction on the real estate market, notably commercial. Early July, a number of British property funds have frozen their transactions. The risk of transmission to the banking sector is high due to the number of SMEs which rely on real estate as collateral to secure their borrowings. The risk is however subdued by a strong capitalization of the banks. Furthermore, household indebtedness is important (125% of GDP) and the risk of a housing bubble burst needs to be monitored, despite of less deteriorated real estate indicators. A positive point, the exporting sectors should benefit from the sterling depreciation to gain in price competitiveness.


Fiscal consolidation, a government priority in the past years, could be questioned

The government is still on a programme of fiscal consolidation, even if the deficit is reduced slower than expected. This is being carried out through spending cuts (public sector wage moderation. cuts in health spending). On the revenue side the budget includes tax cuts on investments as well as lower corporate tax (lowered to 15% after the vote). If for the time being no emergency plan has been announced, a deterioration of public finances is likely to happen considering the economic slowdown, and stimulus measures could be implemented before the end of the year.
The current account deficit hit a record high in 2015 and should not significantly improve this year: import prices should increase with the sterling depreciation which reached a low point against the dollar in July. However in a second step this depreciation should help to gain in price-competitiveness and therefore boost exports, and imports should decrease with the internal demand slowdown.


Strong uncertainties over UK’s future

David Cameron announced his resignation the day after the vote, replaced by Theresa May, former Home Secretary, in July 2016. Article 50 of the Lisbon treaty. which regulates the process of withdrawal from the EU, should not be activated by the beginning of 2017. May announced her willingness to negotiate a new deal before invoking the article. Three types of agreements are possible: (i) EEA membership, like Norway, with a full access to the single market but loosing voting rights on regulatory framework and EU decisions –the most likely scenario-; (ii) a “customized” bilateral agreement, like Switzerland, which establishes access to the single market for specific sectors and (iii) WTO rules with existing custom tariffs and no access to the single market.
Moreover Scotland announced its wish to remain in the EU (in accordance with its vote) and a new referendum could take place with the risk of leaving the UK. Northern Ireland’s case could be an issue too.

The country has gained two places in the Doing Business rankings and is in first place among the G7 countries. The business climate is improving: it takes only 4.5 days to set up a business (compared with an average of 20 in other countries), with a cut in corporation tax and increased exemptions on social security payments helping to improve the country's attractiveness.


Last update : September 2016



Cheques are generally used for both domestic and international commercial transactions.


Bank transfers are common with SWIFT transfers being utilised regularly.


Direct Debits and Standing orders are recognised as an effective method of making payment for regular and expected financial transactions.



Debt collection


The debt collection process usually begins with the debtor being sent a “demand for payment” followed by a series of further written correspondence, telephone calls and, debt value permitting, personal visits and debtor meetings. Each stage of the collection process is designed to escalate from an amicable – pre-legal- collection phase towards litigation should the debtor fail to remedy the debt.


The Court judiciary consists of:


1)The County Court, has a purely civil jurisdiction.

Judges handle claim for collection of debts, personal injury, breach of contract concerning goods or property, recovery of land, family issues (divorce, adoption). Cases valued at less than GBP 25,000 (and GBP50,000 inpersonal injuries cases) must start in the county court.


2)The High court of Justice,

The High Court is based inLondonand also has provincial districts known as “District Registries” all acrossEnglandandWales. There are three divisions.


3)The Court of Appealconsists of two divisions: the “Civil Division” and the “Criminal Division”


4)The Supreme Courtis composed of 12 professional justices, with a president and a deputy president.





The United Kingdom has a “common law” system.



A) The Civil Procedure Rules


The Civil Procedure Rules / CPR (cf. Lord Woolf reform) were implemented inEnglandandWales, on 26 April 1999. The rules aim to simplify and speed up the process of taking cases through the courts.


There is an identical procedure and jurisdiction in both the County Court and the High Court.


Ø A number of litigation “tracks” have been created, each having their own procedural timetables.

Claims are allocated to a track by a procedural judge according to their monetary value.


B) The litigation process


1)Pre-action protocols

They are transactions process which should be followed before starting an action in court. These transactions are in place to encourage parties to try to settle a dispute without the need for court proceedings, thus minimising costs and court time.


2)Proceedingsare formally started when the claimant (formerly “the plaintiff”) issues a Claim Form in the County Court or the High Court.


There is a standard claim form for both High Court and County Court actions.


ð Full details of the complaint are set out in the Particulars of Claim.


ð The Claim Form must be served either by the court, or by the claimant, on the defendant.

The defendant then has the opportunity to respond to the claim form within 14 days of service.

An extension of time for a total of 28 days is agreed for debtor’s filing a defence and/or a counterclaim.


3) Once the parties have exchanged these formal documents, the court will order the parties to complete an “Allocation Questionnaire”.


4) Disclosure of documents

The parties will be required to make a reasonable search for documents which are relevant to the case.


The new rule states the parties should only have to disclose (i.e. provide to each other) documents which are necessary to determine the issues.

The purpose of disclosure is to prevent either party being taken by surprise in the course of the trial.

When the court requires technical evidence or expert opinion, the court may appoint a single expert to assist the judge. The court can direct the parties to appoint a single joint expert.

Experts are required to give independent evidence to assist the court.


5) Cross-examination

This is only permitted on limited issues upon application to the court where it is established that such cross-examination is necessary.

However, cross-examination of all factual witnesses and experts often is automatic and broad.

The claimant’ witnesses may be cross-examined by the opponent’s counsel and then re-examined on behalf of the claimant.


6) Freezing order (formerly Mareva Injunction)

A "freezing injunction" or "freezing order" is a special issue of interim order stopping a party from disposing of assets or removing them out of the country.


7) Judgment

- The judge adjudicates on the evidence put before him and does not make his own independent enquiries.

- The judge will consider previous court decisions in similar matters (common law system) and is usually bound to follow these.

- The judge will either give his judgment immediately, or if the matter is complex, will give judgment at a later date.


C) Enforcement of judgment.


If the claimant is successful in obtaining a monetary judgment, but if the defendant does not pay voluntarily, the methods are:


1)The garnishee order (third party debt order).

The claimant may obtain a court order which directs a third party who owes a debt to the defendant to pay directly the debt to the claimant.


2)The charging order.

The claimant may obtain a court order which grants a charge on certain assets of the defendant (e g. property, stocks, shares) .


3)The writ of execution (execution order).

The court bailiff seizes personal goods (except essential livings items) at the defendant’s home or premises to be sold by auction and to pay off the debt.


4)The attachment of earnings.

If the debtor has a professional activity, the claimant may apply for a court order that the employer deduct a proportion from the debtor’s wages each week or month in order to pay off the debt.


5)The winding up petition or the bankruptcy petition.

Ø Insolvency Act 1986 - regularly amended.

Insolvency trend United Kingdom
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