Agencies-Gaza post
Half a million of small businesses in UK could go bankrupt
Unless new wave of government aid is unleashed immediately, around 500,000 small businesses in the UK will go bankrupt within weeks, Federation of Small Businesses (FSB) leader Martin McTague has warned.
“We have no problem with how the chancellor dealt with consumer needs,” McTague told BBC Radio 4’s Today program earlier this week, commenting on the latest £15 billion ($19 billion) living expenses package released by the UK government.
“But there’s still a massive problem with small businesses,” he said.
“They’re facing about twice the inflation rate of their production prices, and that’s a ticking time bomb. They literally have weeks before they run out of money and that means hundreds of thousands of businesses and many people are losing their jobs.”
McTague also cited the latest figures from the Office for National Statistics, which showed that 40%, or two million, of UK small businesses had less than three months of cash left to run operations.
According to the FSB chairman, about 10% or 200,000 of those two million were in “serious difficulties,” while another 300,000 “I only have weeks left.”
In April, consumer price inflation in the UK hit 9%, the highest level since 1982, which inevitably pushed up costs through soaring energy bills, record petrol prices and the rising cost of a weekly grocery shop. The Bank of England expects inflation to peak at up to 10% later this year.
Businesses have also been faced with rising costs, as the price of inputs rose 18.6% last year, hitting an all-time high. As a result of inflationary pressures, companies have been forced to raise their prices.
According to the Barclays SME Barometer, almost three quarters of UK small and medium-sized businesses are concerned about the long-term impact of the cost of living crisis, rising energy costs and rising inflation.
