Business Banking Outlook 2024 – UK Economy in Focus
(20 December 2023 – United Kingdom) Credit conditions are predicted to tighten in the United Kingdom (UK) in 2024 as interest rates peak.
S&P Global Ratings anticipates rates will remain high for longer, while other monetary policy decisions could be yet to come, such as a more rapid exit of the asset purchase programs or higher mandatory reserve requirements for banks.
Key downside business banking risks for the UK economy include
- A protracted, painful recession, leading to higher corporate insolvencies and unemployment.
- Market volatility and financial instability due to overly restrictive financial conditions.
- Banks’ failure to deliver commercially and operationally resilient business models
“A recession could undermine the financial health of corporates and households, weakening banks’ asset quality and business prospects. Tighter financing conditions would pressure financial institutions with weaker funding structures, especially non-bank financial institutions with high refinancing needs, and expose banks to higher counterparty risks” states S&P Global UK Managing Director. Financial Institutions, Alexandre Birry.
“Failure to tackle inefficiencies, properly digitalise the business, and sustain resilience to cyber-attacks could challenge the long-term viability of some institutions” Birry added.
Utilising East & Partners’ ongoing global primary voice of the customer intelligence and analytics, the 2023/24 Outlook offers a clear and evidence-based indication of what may lie ahead. Helping equip banking and finance leaders with a greater understanding of what lies behind today’s complex markets, enabling them to develop more robust strategies focused on the ultimate goal of sustainable growth.
The intelligence of decision makers, by decision makers - download your free copy of East & Partners Outlook now.
“There are clouds forming as interest rates rise and inflationary pressures impact all business globally. Navigating these challenges, hand in hand with the customer, remains an evolving role for banks and lenders” commented East & Partners CEO, Brett Williamson.
“Critical to brand success for banks in these markets continues to be a genuine return to customer centricity, putting the right customer at the centre of everything. CFOs, treasurers and business owners are increasingly asking for guidance from their relationship banks in a rapidly evolving world; banks that respond and deliver insight driven value into their corporate relationships will win.”
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