Record number of firms go bust

According to the Tories, nearly 27,000 businesses have shut their doors since the downturn began, compared with 24,000 in the early 1990s recession and only 9,500 during the 1980s’ economic crisis.

Although worrying, the increase in business closures can be blamed in part on the greater overall number of businesses around today. The stock of UK businesses has flown up in the last 20 years.

The Tories claimed their figures illustrated the perilous economic conditions currently being faced by UK firms, while the government pointed out that the proportion of firms collapsing was less than half the number during the previous recession.

The news comes as new figures revealed that Britain is in its worst slump for 90 years. Official statistics show that the economy shrunk 0.2 per cent between July and September.

Jonathan Loynes at Capital Economics said that a return to growth was being hampered by a contradiction in government economic policy.

"In the short term they want people to keep spending and lift us out of recession,” he said, “but over the longer term they need to rebalance the economy away from excessive dependence on household borrowing and consumption."

Related articles:Borrowing is like "running through treacle"The Pre-Budget Report was "yet another attack on small businesses"

Share this story

0 0 vote
Article Rating
Notify of
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x
Send this to a friend