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Are UK companies facing a difficult financial 2016?

January 19, 2016 | Financial Saviour

After more than a quarter of a million UK companies ended last year in ‘significant’ financial distress, we’re looking at the causes and what it means for the financial business landscape in 2016.

Regardless of the state of the economy, there are always going to be businesses for whom the term ‘Happy New Year’ couldn’t be further from the truth when the year does indeed draw to a close. A crisis no doubt, but it is also highly concerning to see a rise in the number of businesses in this situation and deemed to be at a ‘significant’ level of financial distress.

Research into the final quarter of 2015 found there to be a 17% increase in businesses at this level when compared to the same period in 2014, and that is always a cause for concern as the economic future is plunged into uncertainty.

Despite an improving economy, certain sectors were particularly hard hit in 2015, many of which are considered key to the UK’s economic growth; the construction sector for example wasn’t helped in the slightest by labour shortages and the price inflation of building materials. All in all, this ultimately meant that many business would start 2016 in an extremely unfavourable financial state.

George Osborne

Speaking in Cardiff on January 7th, Chancellor George Osborne said there is work to do to “shake off the sense of complacency about our economic prospects”.

So what can these struggling businesses expect from 2016? Unfortunately it’s highly unlikely that it’s going to get any easier and it could well be another challenging 12 months.

Low levels of business investment and high levels of consumer debt are two factors carrying through from last year that will continue affecting the financial landscape for many UK businesses, while more uncertainty is being piled on with a new National Living Wage set be begin in April as well as the impending EU referendum.

We understand it’s a very difficult and critical time for many businesses, so we offer consultation services to help with business restructuring and financial planning, to name just a couple. Get in touch with our experienced team today to ensure your business takes a proactive approach to power through difficult financial times.

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