News

Recession over – at last

As widely predicted, it has recently been confirmed that the UK did indeed exit its longest recession on record in the last quarter of 2009, but any celebrations were somewhat muted as most experts still predict a tough few months ahead.

The initial figures, released on Tuesday, 26 January, showed the UK economy grew by just 0.1 per cent over the three months concerned, later revised up to 0.3 per cent as more data came in. Economists had predicted an average rise of 0.4 per cent, leading to renewed concern that any recovery is likely to be slow and volatile.

R3, the professional body for insolvency practitioners had already predicted the number of insolvencies would be higher in 2010 than 2009, even once the economy started to recover as struggling firms run out of time and creditors begin to demand their money back.

A fragile recovery would make it less likely that the government could cut public spending quickly in order to bring down the budget deficit. It also means a return to recession cannot be ruled out, making it more important than ever that firms keep a close eye on the money they are owed and ensure bad debts do not get out of hand.

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