portland independent media center  
images audio video
newswire article reposts

Business failures hit 8-year high

"Our own economy is slowing down but if you look at the global markets, all doors are closing at the same time," Mr Mellor said. "The US is still to pick up, Germany is almost in recession, France is slowing down and the far eastern markets are all suffering."
Business failures hit eight-year high

Mark Tran
Monday December 30, 2002
 http://www.guardian.co.uk/business/story/0,3604,866678,00.html

The number of business failures in Britain in 2002 shot up to its highest level for eight years as the global slowdown took its toll, a survey said today.

The business information company, D&B (previously called Dun & Bradstreet), said 43,500 businesses went into liquidation or bankruptcy this year, a 7.2% increase on 2001 and the highest number since 1994. During the recession of the early 1990s, business failures topped 60,000 a year in Britain.

South-west England, the Midlands and London suffered the biggest increase in business failures. Most of this year's casualties were among small companies, but D&B said the worldwide economic slowdown made larger firms increasingly vulnerable,

If this year was tough, 2003 could be even worse for businesses as D&B analyst Philip Mellor predicted that even more would go under in 2003.

"I do think it's going to be worse during the first six months of next year as larger companies cut back and cut back," although Britain was weathering the storm better than many countries, he said.

"Our own economy is slowing down but if you look at the global markets, all doors are closing at the same time," Mr Mellor said. "The US is still to pick up, Germany is almost in recession, France is slowing down and the far eastern markets are all suffering."

Digby Jones, the head of the Confederation of British Industry (CBI), who has strongly attacked the government for raising business taxes, said Britain still was still better-placed than its EU rivals.

"I'd rather be in business in the UK than anywhere else in the EU but that does not mean that 2003 will not be extremely difficult," he said.

The chancellor, Gordon Brown, last month pared back economic growth forecasts for the UK, saying that Britain's economy would grow by 1.6% in 2002 - less than the 2% to 2.5% he predicted in his Budget last spring.

Despite a slowing economy, the UK has expanded at a faster rate than its peers in the G7 group of industrialised countries. Thanks to the lowest interest rates in 39 years, a buoyant housing market and strong consumer spending have kept the UK economy afloat. But there are growing fears that a housing crash will bring the economy to a grinding halt.

homepage: homepage: http://www.guardian.co.uk/business/story/0,3604,866678,00.html
address: address: Guardian UK