WALTHAM, MA, 13 December 2007 — Global Insight, the world's leading company for economic and financial analysis and forecasting, announced today that corporate bankruptcies in the United Kingdom are expected to rise 3% in 2008, after falling more than 6% in 2007. Financial services turmoil combined with high interest rates and a strong GPB will continue to put pressure in 2008, driving GDP growth into a slowdown.

Global Insight forecasts that the industries that face the greatest increase in risk ratings in 2008 are in the financial services, agriculture, chemicals, metals, and construction sectors. Relatively high-risk ratings in utilities and beverages combined with weaker balance sheet positions for companies operating in these industries provide more exposure to default probabilities.

Financial institutions and insurance companies' risks should be impacted significantly by the current credit squeeze and resulting slower business activity. In particular, more profitable but highly risky segments of investment banking and lending are at risk. Moreover, retail banks should expect to continue suffering from high bad-debt charges arising from their consumer loans and credit card businesses, as high interest rates and surging house prices have added even more pressure on already heavily indebted U.K. consumers.

Construction is negatively impacted by the turmoil in financial services, as mortgage lenders are expected to be less aggressive in pricing and risks, affecting the demand for new houses. Skyrocketing house prices in the last couple of years are expected to grind to a halt in 2008, increasing pricing and profitability risks for home builders. Meanwhile, overall declining capital expenditures in the United Kingdom and a continued growth of energy input costs will add to surging pressures respectively on growth and profitability risks. In turn, cash flows will be hit and segments with relatively high historical debt risk ratings such as construction materials will face stronger credit risks.

Agriculture in the U.K. faces the same kind of situation as in the rest of Europe, with a saturated domestic market offering limited growth prospects, leading to fierce competition on pricing. On the exports market, the strong GBP makes British crops less competitive and less room for sales growth. Combined with rising energy prices and input costs, this should further damage margins and contribute to a significant increase of profitability risks.

Basic industrial chemicals and fertilizers and pesticides should also see their growth risks increase as a result of declining expenditures by the construction and agriculture industries. Together with high oil prices, poor growth prospects will in turn lead to soaring operating profits risks, in particular for petrochemicals producers and rubber and plastics manufacturers. However, chemical companies in the United Kingdom are not really exposed to large debts, although specialty chemicals show a fairly higher asset-to-equity ratio, which will be a beneficial in a downward cycle.

Metals products are facing stronger competition on the export market since China has become a net exporter of steel since 2006, making it more difficult for strong-currency European exporters such as the United Kingdom to sell their production abroad. Basic and fabricated metals are expected to be strongly hit, along with machinery and equipment makers and motor vehicles manufacturers.

A few sectors will see their risks profiles improve in 2008, such as electronics and pharmaceuticals. Energy-mining is also projected to show a slight recovery, as surging oil prices have a positive effect on profitability. However, growth prospects remain poor and this industry still tops Global Insight's risks ranking.

Global Insight's Sector Risk Ratings are produced as part of the World Industry Service and are updated quarterly. These risk ratings are designed to assist credit analysts and asset managers in identifying the best prospects for movements in sector credit quality on a comparable basis across industries and across countries. For more information and excerpts on the U.S. corporate bankruptcies forecast, please visit http://www.globalinsight.com/corpbankruptcies.

Contact:
Mark Killion, CFA, MD World Industry Service, Global Insight
+ 610 490.2547 (mark.killion@globalinsight.com)

Alain Faucher, Economist, World Industry Service, Global Insight
+44.207.452.5063 (alain.faucher@globalinsight.com)

Catarina Feria-Walsh, Media Relations, Global Insight
+44.207.452.5183 (catarina.walsh@globalinsight.com)

About Global Insight
Global Insight, Inc. (http://www.globalinsight.com/) is a privately held company that brought together the two most respected economic information companies in the world, DRI and WEFA. Global Insight provides the most comprehensive economic and financial information available on countries, regions and industries, using a unique combination of expertise, models, data and software within a common analytical framework to support planning and decision-making. Through the world's first same-day analysis and risk assessment service, Global Insight provides immediate insightful analysis of market conditions and key events around the world, covering economic, political, and operational factors. The company has over 3,800 clients in industry, finance, and government with revenues in excess of $95 million, over 675 employees and 25 offices in 14 countries covering North and South America, Europe, Africa, the Middle East, and Asia.