The only certainty is uncertainty – by Sue Chapple FCICM

2 July 2020

Bertrand Russell once said: “What men want is not knowledge, but certainty.” Unfortunately, certainty is a commodity today that is rather hard to get hold of.

There are many things we do not know. We don’t know, for example, if, when and where there may be a second wave of the virus, or when and how many local lockdowns there may be.. We don’t know what impact digital investments will have in terms of future employment, as companies have accelerated their previously ‘long-term’ plans from years to months. And we also don’t know with any certainty which companies will fail, and which will survive in a post-COVID world.

The world today is full of imponderables. With the shops re-opening, will consumers be enticed out in numbers and how much will they spend, or will they stay in and hunker down? What impact will payment holidays have and will they, as I very much fear, simply store up trouble for later? Certainly some early CICM research suggests trouble ahead, and the impact will be shared with equal pain by debtors and creditors alike.

We do know, as with any crisis, it is the fittest that will survive, and those that have adapted to a change of circumstances with the necessary agility. But there the Darwinian analogy must end, for we must also show support and consideration for the weakest – in the economy and society at large.

One thing we also know with certainty: we have to get the economy going again, and credit teams will play a critical role in choosing who to extend credit to, and understanding the risks attached, even though those risks will become increasingly difficult to determine.