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Contractor accountants told global economy is in a bad state

Contractor accountants told global economy is in a bad state

Trevor Williams, the corporate chief economist for Lloyds TSB, recently took the stage at the Meet the Experts conference to tell contractor accountants that the global economy is in a bad state.

Of course, this news will come as no surprise to anyone; we know the world is struggling to recover from the 2008 credit crisis, and in fact problems in the Eurozone are increasing the risk of a double-dip.

Williams told accountants they must pay close attention to funding costs and liquidity trends and keep an eye on default rates if they are thinking about applying for credit.

He went on to say that the probability of Greece defaulting on their debts in the coming few years is more than 100%. Surprisingly, he felt the probability of an Italian default was just over 5%, and for Ireland about 10%.

In the wake of all this worldwide doom and gloom, the CBI has cut its growth predictions for the UK economy. Previously the business organisation predicted growth of 1.3% this year and 2.2% next. These figures have been lowered to 0.9% and 1.2% respectively. The CBI also expects unemployment to rise to 8.5% next year.

On the positive side, the UK is expected to narrowly avoid dropping back into recession this winter but the government must continue with its spending cuts if we are to protect our AAA credit rating. The CBI also pointed out that if mainland Europe goes into recession, UK exports would be badly hit.

Finally, the CBI agrees with the Bank of England’s prediction that inflation will start to ease next year and by 2013 it will have dropped to the Bank’s 2% target rate.

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Image: Unsure by radioedit

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