Business failures to peak early 2010

 

The rise in business failures is set to end early in 2010 as the UK economy returns to growth and financial strain on businesses eases, according to a report from accountants and business advisors BDO.

The report does, however, forecast a two-speed recovery, with fortunes split between the continued strain on consumer sector firms and improving conditions for manufacturing, real estate and business sectors.

BDO LLP forecast that business failures in the more consumer focussed sectors would continue to rise until autumn 2010.

"The economic outlook is looking brighter amidst improved lending conditions and confidence in the markets" said Shay Bannon, head of business restructuring at the firm.

"However, the fall-out of the economic downturn will mean that looking ahead we can expect business failures to remain on an elevated level in 2010, with 32,700 firms predicted to go under, as recovery will be sluggish, undermined by fiscal cutbacks."