Insolvency specialists predict boom as Covid support ends

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Businesses in distress have been protected from their creditors since June 2020 and have benefited from other economic measures such as furlough, which helped them preserve cash while protecting jobs. But October will see furlough and business rates relief end.

Other measures, such as protection from creditors seeking winding up orders, will be scaled back before coming to an end on March 31, 2022.

Insolvency and restructuring group Begbies Traynor expects business to boom.

Executive chairman Ric Traynor said: “The insolvency market has been suppressed over the past 18 months due to Government support measures.

“However, since May the Insolvency Service has reported month-on-month increases in insolvency appointments nationally. We expect this trajectory will continue as the support measures are progressively removed.”

Fears are building that Britain could fall into a period of stagflation, where stagnant growth or rising unemployment occurs at the same time as rising inflation, after the Bank of England warned that inflation will stay higher for longer than expected.

It said soaring energy prices will push inflation in the fourth quarter above the four percent it forecast last month.

The Bank added that inflation could stay above that level during the first half of 2022, instead of falling back to two percent as it had hoped.

Rising energy prices are putting pressure on Britain’s stalling economy, which is suffering from the Delta variant of Covid, and shortages of raw materials, HGV drivers and workers in a number of sectors.

Kevin Brown, savings specialist at Scottish Friendly, said: “With prices soaring, people are going to largely batten down the spending hatches and this is going to kill off the recovery in its relative infancy.

“The Bank warns that consumer confidence and therefore growth is already buckling.”

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