250,000 small British companies shut down without further financial aid

An industry group says at least 250,000 small businesses in the UK could close unless the government gives them more financial aid.

The Small Business Federation (FSB) warning on Monday comes after authorities imposed new lockdown measures to contain the highly contagious strain of the Coronavirus, and as the United Kingdom approaches its second recession in many years.

Lobbyists say the 4.6 billion pounds ($ 6.2 billion) that Counselor Rishi Sunak declared as emergency aid at the start of the lockdown is not enough.

“The development of business support measures has not kept pace with increasing restrictions,” FSB Chairman Mike Sherry said in a statement. “We risk losing hundreds of thousands of large, viable small businesses this year at great cost to local communities and individual livelihoods.”

The FSB’s quarterly survey, Small Business Index (SBI), found confidence at the second lowest level in its 10-year history. Just under 5 percent of 1,400 companies surveyed expect to close.

Government data shows that there are around 5.9 million small businesses in the UK that employ around 16.8 million people.

The SBI confidence measure of -49.3 points, down 27 points year-on-year, which is the second lowest level in the history of the SBI, after the measure recorded in March 2020. Of those surveyed, 80 percent said they did not expect their performance to improve more than The next three months, 23 percent said they laid off employees during the fourth quarter from 13 percent at the start of last year; And 14 percent said they would have to cut numbers over the next three months.

Moreover, the proportion of small businesses expecting their profits to shrink in the next quarter increased from 38 per cent a year ago to 58 per cent now, an all-time high.

The UK is in lockdown until at least mid-February, prompting Bloomberg Economics to forecast 4.5 per cent contraction this quarter. Production may have declined in the last three months of 2020, capping the economy’s worst year in three centuries.

“This government can stop losses and protect businesses in the future, but only if it acts now,” said FSB’s Cherry, adding that the support mechanisms at the start of the first national shutdown were “an exceptionally good starting point” while the announced measures for this second shutdown are “whine” “.

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