According to the latest statistics published by the Office for National Statistics (ONS), around one in ten businesses claim their risk of insolvency to be moderate or severe, with the majority of those seeing their turnover fall by more than half.
The data forms part of the ONS’s latest Business Impact of Coronavirus survey and it suggests that large parts of the British economy are still struggling to get back on their feet following the disruption caused by Covid-19.
The numbers revealed some 10 per cent of firms have estimated they are at ‘moderate’ risk of being unable to pay their bills in the near future, with one per cent of businesses claiming their risk of insolvency was ‘severe’.
Almost half of all companies (45 per cent) said they faced at least some risk of going bust in future, whilst 41 per cent of businesses claim they have less than six months’ worth of cash reserves and four per cent stating they have no cash reserves at all.
Jack Izzard, director of The Great British Bounce Back, a community of small and micro businesses fighting back against Covid-19, commented: “Based on this evidence, a tenth of the UK economy could disappear overnight.
“The fact that more than a quarter of UK businesses have seen their turnover decrease by more than 20% again underlines the sheer scale of the problem that lies ahead. The UK economy is running on fumes.
“Many of our members have pivoted and adapted as best they can, but many have lacked the financial support required to tackle the disruption.”
Chloe Gibbs, a Senior Statistician at the ONS, said: ‘Despite recent economic news, it is encouraging to see that four in five businesses say they are at no or low risk of going bust.”
