Begbie’s Traynor – UK’s Insolvency Situation Really Horrible
Ok, our words not theirs, but they did say that 140,000 companies “experienced significant and critical financial problems” in the fourth quarter of 2009 according to their statistics…
And that is not the end of the bad news unfortunately.
Worse to come – Ric Traynor, Executive Chairman of Begbies Traynor Group, said:
“Government support measures are providing welcome relief to the UK’s struggling companies in the short term but they may exacerbate problems for some businesses as the need to repay debt catches up with them later in the year.
“Experience of the last four recessions tells us that unemployment levels and corporate and personal insolvencies have lagged behind technical recession by 1 to 2 years. With tax and interest rates certain to rise, as well as increasing pressure on consumer spending, there is every reason to suggest that the insolvency peaks of this recession remain some way off.
“While business finance is expected to become more readily available during the first half of 2010, we anticipate a rise in the levels of financial distress during the second half of 2010, as temporary financial support measures are unwound.”
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