A closely-watched report on the financial health of UK businesses has warned of a perfect storm by the year's end for"zombie companies", with the coronavirus crisis already placing more than half a million firms on the brink.
According to the latest Red Flag Alert from insolvency specialists Begbies Traynor, an easing in government support schemes at a time of continuingIt said the current bans on lease forfeiture and winding-up petitions was masking the scale of the problem, with 557,000 companies already in"significant distress" in the last quarter of the year - the three months to September.
It marked the biggest leap in quarterly distress since 2017, the report said, with sectors showing the greatest increases of distress including hospitality, food and drugs and construction. The cash flow crisis comes despite schemes to ease the financial burden such as Bounce Back loans and furlough wage support.The Job Retention Scheme is to be replaced by an already sweetened Job Support Scheme at the beginning of next month while otherThe chancellor was forced to bolster the generosity of his Winter Economic Plan last week amid warnings the resurgence of coronavirus restrictions risked tipping many of the viable jobs he wished to support over the edge.