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Stocks and oil slump on fears over China virus outbreak

Stocks and oil slump on fears over China virus outbreak

Brexit uncertainty plus political turmoiled equalled financial distress for almost half a million British businesses in the final three months of last year, according to a new survey which measures corporate health.

494,000 companies were found to be in significant distress in the last quarter of 2019 by the latest red flag alert from insolvency firm Begbies Traynor, representing about 14% of all economically active firms and the highest number since the survey began in 2004. Significant distress is described as firms which have county court judgments of of less than £5000 filed against them, or businesses which have been identified by its credit risk system.

The number of businesses in significant distress has risen by 81% since the start of 2016. The uncertainty following the European referendum result is partly to blame, according to Julie Palmer, a partner at Begbies Traynor.

“Distress increased to record levels on the back of ongoing uncertainty around Brexit. These figures clearly demonstrate the impact of this indecision, and with political certainty and a clear Brexit path, UK businesses should, at last, be able to plan for 2020 with a greater sense of clarity,” she said.

Retail, real estate and property and construction sectors suffered more than others, although significant distress at businesses rose in 15 out of 22 sectors of the economy. The highest year-on-year increase in the number of businesses suffering significant financial distress was seen in the real estate and property sector, with a 13% rise in the number of businesses affected. The survey finds financial difficulties affecting both bricks-and-mortar and online retailers.