Report reveals financial difficulties for UK firms
A report by insolvency specialist Begbies Traynor has revealed 2011 could see a 10% hike in insolvencies.
According to the report, 147,836 firms are facing serious difficulties than at any time since the beginning of 2009.
The report suggests firms are still feeling the effects of the recession and the Government spending cuts will only make the problem worse.
Begbies highlights that companies faced with financial difficulties owe more than £52.7 billion – this is less than the £57.5 billion owed during the previous three months.
Commenting on the report, Ric Traynor, chairman of Begbies Traynor, said: “The figures demonstrate that the sectors most reliant on government spending are already feeling the impact of public sector cuts.”
The report concludes that these difficulties could lead to approximately 23,500 formal insolvencies in 2011 – 19% more than the 21,500 firms that went insolvent in 2010, according to Begbies.
The report comes just a day before the Office for National Statistics will reveal the UK’s economic growth figures for the final quarter of 2010.
Analysts expect growth to have slowed significantly to 0.2% in the quarter, down from 0.7% in the third quarter and 1.1% in the April to June period.