Alex Brown, global head of asset finance, Barclays Corporate

A general election, two budgets, a
pre-budget report, a Comprehensive Spending Review and continued
talk of austerity has impacted both business and consumer
confidence during the past 12 months.

A period of continued uncertainty also lies
ahead, as the announced spending cuts become a reality for many in
the UK, but there should still be sufficient momentum in business
and consumer demand to ensure that the UK economy keeps
growing.

Indeed, it appears that the general consensus
is one of slow but sustained growth, following a raft of economic
data over the past few months clearly indicating that the global
recovery is intact, with fears of a double dip recession having
abating.

Barclays economists expect GDP growth of 1.6
percent in 2010, 2.1 percent in 2011 and 2.2 percent in 2012.

While this creates a stable environment for UK
businesses, these are still subdued growth rates by historical
standards, and this will continue to impact negatively on
unemployment figures.

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In terms of general demand, a strengthening in
household consumption, net trade and investment should offset some
of the fall in public sector demand.

Business investment certainly has the potential
to grow in 2011, as non-financial firms in the UK have been running
substantial cash surpluses in recent quarters.

Globally our economics team expects growth to
slow moderately, to about 4.25 percent in 2011 from 4.9 percent in
2010, with the slowdown mainly the result of softening emerging
world growth, particularly Asia and Latin America.

Indeed, emerging market countries are set to
move towards more sustainable growth after the strong rebound
following the crisis.

Smarter management teams who spot opportunities
created by the recession as the UK and global economy recover and
confidence increases will continue to look to asset finance as part
of a balanced investment strategy in the year ahead.

This has clearly played out through the
consistent growth we have seen in asset finance transactions in
recent years and there is little sign of this trend slowing in
2011. 

Flexibility is the key as asset finance can
leverage an increasingly diverse portfolio of assets. Aside from
the traditional assets of stock, new equipment and vehicles, the
breadth and range of assets which are being funded now includes
rail and helicopters.

We are working very hard, as a bank, to make
sure there is sufficient funding in the market for those businesses
which will be looking to invest and upgrade in their infrastructure
as confidence returns.

As the need for wider and more diverse funding
sources increases due to the sheer number of businesses that will
require refinancing in 2011 and particularly 2012, asset finance is
and will continue to be a vital segment of the UK business funding
mix.