TENS of thousands of British businesses are set to go bust – and the failure rate will not slow until at least 2011 – a grim survey revealed yesterday.
The Industry Watch report by accountants BDO Stoy Hayward said a record 36,200 businesses – almost a hundred every day – would fail this year, and an even greater number in 2010.
With the number of people out of work in the UK expected to ri
se well into next year, the report forecast a 4 per cent fall in consumer spending in 2009. It said that would impact on sectors most reliant on disposable income, such as retail, leisure and personal services.
The survey forecast a 3.5 percent fall in employment in 2009 and a further 1.9 per cent drop in 2010 – a year when the report predicted that 40,400 businesses would go under.
Shay Bannon, head of business restructuring at BDO Stoy Hayward said: "Business failures in Britain are rising unabated as the fallout of the economic downturn becomes ever clearer.
"Consumer spending is set for a steep contraction in 2009 and households will continue to be hit by rising unemployment, weaker earnings growth and reduced perceived wealth levels due to declining asset prices."
BDO said government measures taken to help rescue the economy from the worst of the recession would begin in 2011 to "significantly slow down the rate at which businesses fail".
Looking at key sectors at risk, BDO said 4,300 retailers would become insolvent in 2009 – a 33.3 per cent increase from 2008 – and the corresponding figure would peak at 7,335 in 2010.
