Twelve per cent of all businesses in the UK think they will buckle in the next three months, as tough coronavirus restrictions continue to weigh on the British economy.
Around eight per cent of businesses currently trading have none or little confidence of surviving over the next three months, according to the latest figures from the Office for National Statistics (ONS).
Meanwhile 30 per cent of those temporarily shuttered due to Covid restrictions think they will be forced to permanently close before the spring.
Of the 39,000 British businesses surveyed by the ONS, 42 per cent had less than six months’ cash reserves, while four per cent had no emergency money in the bank at all.
It comes as British businesses continue to suffer under the toughened tier system, with more than 99 per cent of England currently living under the top two levels of restrictions.
Separate figures from the ONS released this morning showed that the UK’s economic growth almost flatlined in October, as fresh restrictions took their effect on Britain’s pubs and restaurants.
The UK economy still remains 7.9 per cent below pre-pandemic levels, with experts predicting that GDP will slam back into reverse in the final quarter of 2020 following England’s second national lockdown.
“The sharp slowdown in economic output in October reflected the squeeze on activity from the re-introduction of tighter coronavirus restrictions, including the tier system in England,” said Suren Thiru, head of economics at the British Chambers of Commerce.
“Firms in hospitality, who are most acutely exposed to the renewed restrictions, suffering particularly badly in the month.”
Ministers are set to review the current tier allocations on 16 December, with health secretary Matt Hancock warning that many regions face tougher restrictions ahead of the festive season.
London Tier 3
Leading business figures earlier this week warned that placing London in Tier 3 could lead to around 150,000 job losses in the hospitality industry.
Kate Nicholls, chief executive of UK Hospitality, told City A.M. that closing the sector would deliver a “killer blow” to thousands of businesses already struggling to survive after England’s month-long lockdown.
“Hospitality has continued to take on a disproportionate burden to allow other parts of the economy to reopen during this crisis,” she said. “These businesses have invested significant time, effort and money to create Covid-secure spaces, and they can play a role in keeping transmission rates down.”
More than 25,000 UK hospitality venues have already buckled under the weight of the pandemic, with industry figures warning that hundreds of thousands of redundancies linger on the horizon as the tier system looks set to stay until the spring.
Pubs are allowed to stay open under Tier 2 restrictions only if they provide a “substantial meal” alongside alcohol, while other hospitality venues including casinos and bars can only stay open until 11pm.
Meanwhile, all hospitality venues must shut under Tier 3 restrictions and can only provide food via takeaway, delivery and click and collect services.
Michael Kill, chief executive of the Night Time Industries Association (NTIA), warned that the introduction of Tier 3 measures in London would wipe out growth seen in the last few weeks.
The number of eat-in diners in the capital bounced back to around 65 per cent of pre-pandemic levels over the weekend following the lifting of England’s month-long lockdown.
“Let’s just hope that government [is] as swift in its proportionate financial support as it is in placing restrictions on businesses within this key trading period,” he told City A.M.
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