For the first time in 11 years, the UK entered into a recession, largely due to the impact of the COVID-19 pandemic. In this blog post, we look at how the economic downturn has affected UK businesses and what businesses must do in order to survive the recession.
The economic downturn
The UK economy fell by a record 20.4% during April – June, as the first UK lockdown and stay at home restrictions shocked the UK and forced many businesses to temporarily close. Prior to the height of the first wave of the pandemic, however, the economy was already on a downfall, as it fell by 2.2% during January – March.
The impact of the downturn
Between March and April 2020, 82.2% of arts, entertainment and recreation businesses were forced to close temporarily or permanently due to the COVID-19 pandemic. 81.2% of accommodation and food services were also forced to close either permanently or temporarily, along with 29.1% of construction businesses.
Roughly 100,000 restaurants are predicted to have closed this year, it is impossible to state whether or not the COVID-19 pandemic directly caused their failure but the correlation cannot be ignored.
As a result of business closures, the UK unemployment rate is at its highest in three years. Between July to September 2020, the unemployment rate was 4.8%, which was 0.7% higher than the previous three months. Roughly, 1.62 million people in the UK are currently unemployed.
How businesses can survive the recession
In order for businesses who are still in operation to survive the pandemic. it is essential they take control over their finances. Supplier and manufacturers, for example, who have outstanding debts with recently closed businesses must exercise tight controls over their cash flow and debtors to ensure their business do not follow the same road to closure.
How can businesses take control?
If your business requires money collection services to maintain control over your finances, Nightfox Investigations and Debt Recovery can provide you with professional business debt collection or face-to-face collection services. We utilise the latest technology, e.g. body cams, and have over 75 years of experience in debt collection.
Contact Nightfox Investigations
Don’t let your business join the thousands of others entering administration this year and trust Nightfox Investigations to get you the money you are rightfully owed and deserve. For enquires, do not hesitate to contact us today.