Monday, July 15, 2024

250,000 UK small businesses set to close without further financial assistance | Business and economic news

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At least 250,000 British small businesses could close because the government’s emergency aid program is insufficient, warns an industry group.

An industry group says at least 250,000 small businesses in the UK could close unless the government grants them additional financial assistance.

The Federation of Small Businesses (FSB) warning on Monday comes after authorities imposed new lockdowns to contain a highly infectious strain of coronavirus and as the UK heads into its second recession in as many years.

Lobbyists say the 4.6 billion pounds ($ 6.2 billion) announced by Chancellor Rishi Sunak as emergency aid at the start of the lockdown is not enough.

“The development of business support measures has not kept pace with the intensification of restrictions,” FSB Chairman Mike Cherry said in a statement. “We risk losing hundreds of thousands of great and ultimately viable small businesses this year, at a huge cost to local communities and individual livelihoods.

FSB’s quarterly Small Business Index (SBI) survey has regained confidence to the second lowest level in its 10-year history. Just under 5% of the 1,400 companies surveyed plan to close.

Government data shows that there are around 5.9 million small businesses in the UK employing around 16.8 million people.

The SBI’s confidence measure is at minus 49.3, down 27 points year-over-year, the second lowest in SBI history, after that recorded in March 2020. Among those polled, 80% said they did not expect their performance to improve. the next three months; 23% said they had laid off staff in the last quarter, up from 13% at the start of last year; and 14 percent said they will be forced to cut numbers over the next three months.

Additionally, the proportion of small businesses that expect their profits to decline in the next quarter has risen from 38% a year ago to 58% now, a record high.

The UK is on hold until at least mid-February, prompting Bloomberg Economics to predict a 4.5% contraction this quarter. Production likely fell in the last three months of 2020, capping the worst economic year in three centuries.

“This government can stem the losses and protect the businesses of the future, but only if it acts now,” said Cherry of the FSB, adding that the support mechanisms at the start of the first national lockout were “an exceptionally starting point. good “while the measures announced for this second lockout are” a whimper “.


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