London, 24 July 2024 – Credit Benchmark, a leading provider of credit risk data and analytics, today said that it predicts default risk for UK industries to rise this year before plateauing in 2025 as post-election economic growth picks up. However, as explained in its new UK Default Risk Outlook, some industries face heightened credit deterioration, with Basic Materials, Telecoms and Technology all predicted to see default rates increase by more than 10%.
“The new Labour administration has inherited some challenging fiscal limits but political uncertainty in other major markets is expected to bring an influx of foreign investment to the UK,” says Michael Crumpler, CEO of Credit Benchmark. “This supply of capital should see growth in several UK industries, but any credit impact will take some time to unfold.”
“And with interest rates remaining high, the shorter-term credit outlook for UK industries is for deterioration,” continues Mr Crumpler. “Our analysis shows that only 18% of the 134 UK sectors tracked by Credit Benchmark will see any decrease in default risk over the next year.”
“We expect to see the biggest jump in defaults in industries already facing global pressures. Basic Materials, Telecoms and Technology firms are looking at increases of more than 10%,” explains Mr. Crumpler.
Credit Benchmark’s new report covers 10 major UK industries, representing more than 11,000 companies, 90% of which are not rated by a major credit rating agency. This significant coverage and diversified dataset allows Credit Benchmark to make unique and credible sector-specific default risk projections for 2024/25. All of Credit Benchmark’s data and projections are based on borrower probability-of-default estimates, which are aggregated from over 40 leading banks, nearly half of which are GSIBs.
This report is the third in Credit Benchmark’s Default Risk Outlook series, with analysis on US and EU Industries published earlier this year.
About Credit Benchmark
Credit Benchmark is a leading provider of credit risk data and analytics. Its products are derived from contributed risk data from more than 40 global financial institutions.
These data are aggregated, anonymized, and published twice monthly in the form of unique obligor-level Credit Consensus Ratings as well as credit transition matrices, sector correlations and credit indices.
The data set covers over 105,000 legal entities, 90% of which are not publicly rated.
Credit Benchmark’s insights are trusted by major financial institutions globally and are used to benchmark their own internal credit risk analysis against those of a global peer group, and gain accurate credit risk views where none were previously available.
Credit Benchmark was founded in 2015 and is headquartered in London, with offices in New York and Bangalore.
For further information contact:
Laura Saville
Head of Marketing
[email protected]
Telephone: +44 020 7099 4322
