According to Ben Chu Economics editor for The Independent, the Bank’s latest forecasts are for output per hour growth to remain subdued over the next three years, growing at well below pre-financial crisis rates.
A deputy Governor of the Bank of England has warned that Brexit is hampering the UK’s productivity growth.
In a speech in Cambridge, Sir Dave Ramsden said that the UK’s departure from the EU is imposing a “dampening affect” on the UK’s productivity, defined as the amount of output the UK workforce can produce per hour worked and the key ingredient of rising household living costs and uncertainty.
UK productivity growth actually grew by 0.9 % in the 3rd quarter of 2017 and reduced to 0.8 % in the final quarter according to ONS stats. This was the strongest growth for some time as output per hour has been stagnant for years.
But despite the signs of growth, the bank’s latest forecasts are for output per hour growth to remain subdued over the next three years, growing at well below pre-financial crisis rates. Sir Dave did however suggest that that the Brexit drag on productivity could ease if the negotiations with the EU progress smoothly this year, reducing the uncertainty for firms.
Many other industrial surveys have shown that Brexit has caused firms to shelve investment plans until the outlook on future trade arrangements with the EU is clearer.
So is this influencing the numbers of companies declaring some sort of insolvency? We have included a snapshot of the movement over the past 10 years below.
||Numbers of Insolvencies
The 2017 figures do include around 2,000 voluntary liquidations of personal service companies following changes to tax laws. This would reduce “normal” insolvency figures to just over 15,000 similar to 2015 figures.
Bev Budsworth of The Business Debt Advisor adds, “2018 is bound to see an increase in insolvencies just taking into account some of the larger insolvencies such as Carillion and 4 of the group companies of Lagan construction which will impact on suppliers and sub-contractors. Also HMR & C recent win in the IR35 battle against Christina Ackroyd, the former BBC Look North Presenter could threaten the survival of thousands of contractor companies.
If you want further information on insolvency and how the different types of insolvency work, do call our Business Debt Advisor team on 03339999689.