One in seven UK companies at risk of collapse as recovery slows
Around one in seven UK companies said they were at risk of collapse as the economy faces a tough winter with coronavirus cases still surging and an England-wide lockdown in place.
The Office for National Statistics (ONS) said 14 per cent of UK companies reported having “low or no confidence” that they would survive the next three months, in a survey covering the two weeks to 1 November.
The figure was unchanged from the previous week, highlighting the ongoing uncertainty that businesses face.
However, the percentage of companies reporting they had “high confidence” they would survive rose to 40 per cent. It stood at 37 per cent in the preliminary survey.
The UK economy has been one of the worst-affected in the world by coronavirus. This is in part due to its reliance on face-to-face consumer spending, such as in pubs, restaurants and cafes.
Suffering spread unequally across UK economy
The survey laid bare the uneven effects of the crisis on the economy. In the arts, entertainment and recreation industry, 34 per cent of workers were furloughed. In accommodation and food services, 22 per cent were.
Out of accommodation and food businesses, an enormous 34 per cent of said they were at risk of collapse in the coming months. Just six per cent of real estate companies said they were under threat.
Although the economy recovered sharply in the third quarter, it remained around 10 per cent below its pre-Covid level.
The new England-wide lockdown, which began on 5 November, is set to knock the economy backwards again. The Bank of England predicted it would contract in the final three months of the year.
The ONS survey showed that nine per cent of workers were on partial or full furlough leave over the two weeks to 1 November.
Since then, chancellor Rishi Sunak bowed to pressure and extended the wage subsidy until the end of March.