The ‘UK corporate sector and Covid-19’ chapter of the August 2020 Financial Stability Report presents analysis of how the Covid-19 shock might affect UK corporate finances this year. This technical annex describes the data and assumptions used to produce the analysis. It updates the material in the May 2020 interim Financial Stability Report and accompanying technical annex. The updated analysis takes into account changes in the economic outlook since May and several modelling improvements. It also includes a novel and experimental approach to estimating the cash flow impact of the Covid-19 shock on small companies. Estimating the impact of the Covid-19 shock on the UK corporate sector carries a high degree of uncertainty, particularly for small companies given the additional assumptions that need to be made to compensate for more limited data availability.
Published on
07 August 2020
Technical annex