Over the period 1999 to 2004, Key Note forecasts total sales for factoring and invoice discounting at current prices will increase at an average rate of nearly 15% per annum to reach almost £110bn. Business for factoring alone is predicted to increase at just over 11% per annum, but the share of total business taken by this form of finance will continue to decline. Against this, invoice discounting volume is likely to increase by almost 16% per annum and its share of total business will grow from 71.4% to 73.4%. Over the same period to 2004, international business will increase significantly.

The volumes of Commercial and Consumer Lending in the UK, measured by amounts outstanding at the end of 1998, reached almost £835bn; an increase at current prices of slightly more than a third against the 1994 figure. Using arrears figures from the Finance and Leasing Association as a guide, at least 3% of this -- some £25bn -- could become overdue within 12 months. Debt management in the UK is, at the moment, subject to a number of new regulations. The Late Payment of Commercial Debts (Interest) Act became effective in 1998 to focus attention on poor payment practices. As a follow up to this, the Better Payment Practices Group (BPPG) is expected to raise awareness of the need for improvements in credit management practices.

For consumers, the pace of legislation offering better protection is also quickening. New proposals have been tabled to further overhaul banking and insurance services and more aptly meet the needs of those on low and volatile incomes. A new White Paper entitled 'Modern Markets -- Confident Customers' has been issued, aimed at promoting open and competitive markets, and encouraging responsible businesses to follow good practices. To help monitor such new ideas, the Office of Fair Trading (OFT) is being given new opportunities to develop its role as consumer watchdog.

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