Companies showing “a level of denial” about economic risks

The three largest credit insurers Euler Hermes, Atradius and Coface have said the economy is a long way from recovery, reports the FT.

Fabrice Desnos, chief executive of the UK arm of Euler Hermes, said: "In the real economy, I haven't detected any sign of an improvement. It will be a long time before demand picks up again."

Desnos said companies were showing "a level of denial" about the poor underlying state of the economy. Credit insurers had acted responsibly, he said. "We've taken action [to reflect the risks of recession-hit companies being unable to pay their debts] in the same way as [if you were in the police] you'd try to limit dangerous driving."

Marc Henstridge, head of risk at Atradius UK, said: "We don't see the UK economy as having yet reached the bottom [in terms of demand starting to rise]." He added that it looked likely the economy could continue to contract for several more months, at least until the third quarter.

Xavier Denecker, managing director at the UK arm of Coface, said: "We don't see any relief [to the credit pressures]. There is no sense the crisis is over."