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One in seven UK businesses in fear of collapse, survey shows

One in seven businesses in Britain was teetering on the brink of collapse even before the new lockdown in England…

By admin , in Money , at November 19, 2020 Tags:

One in seven businesses in Britain was teetering on the brink of collapse even before the new lockdown in England came into force at the start of November, the latest official snapshot of trading conditions has revealed.

The regular update from the Office for National Statistics showed that one in seven firms polled during the last two weeks of October said they had low confidence or no confidence that they would survive the next few months.

Economists are predicting that the economy will take a significant hit from the tougher restrictions imposed to slow the spread of the Covid-19 virus, but the ONS figures suggest that many companies were already struggling.

Pessimism was most apparent among hotels and restaurants where a third (34%) of businesses said they would struggle to make it through to the New Year.

The ONS reported that by the end of October – the date when the government’s furlough scheme was originally due to end – 9% of workers, about 3 million people, still had their wages subsidised by the state.

In the arts, entertainment and recreation sector – much of which remained closed even as restrictions were lifted elsewhere during the summer – 34% of the workforce remained furloughed.

Rishi Sunak, the chancellor, announced earlier this month that the furlough would be extended until at least March, with workers paid 80% of their wages, but the ONS evidence on a possible wave of business failures suggests unemployment will continue to rise through the winter.

Data from the ONS covering the period up until the middle of October showed the impact of the new English lockdown on the economy.

The ONS said footfall among shoppers was 44% of the level seen in November 2019, while traffic on the roads was 22% down on its pre-crisis levels in February.

Meanwhile, the number of adults shopping for items other than food and medicine dropped to 10% – the lowest level since June when non-essential stores were reopened after the first lockdown.