Comment on the Chancellor's Autumn Statement
“The Office for Budget Responsibility has revised its central forecast for economic growth to 0.9 per cent this year and 0.7 per cent next year, down from 1.7 and 2.5 per cent respectively. The forecasts were also revised down for 2013 and 2014, meaning continued stagnation for many UK businesses. This news comes as nearly half the UK’s businesses are already experiencing decreased profits, and a third a reduced sales volume, according to research by R3, the insolvency trade body. We are therefore likely to see a continuation of ‘zombie businesses’ unable to fund expansion while creditors hold back from pulling the plug as asset values remain low. One could argue that this creates an unhealthy base for competitive growth.
"However, the Government is at last taking the initiative in relation to the problems facing the SME sector in successfully obtaining credit. The announcement of Government Guarantees supporting loans to small businesses is to be welcomed and should alleviate some of the difficulties that the sector has experienced following the onset of the economic downturn.”
Frances Coulson, R3 President