Despite the enormous amounts of Government money shovelled on the economy, it looks increasingly like this fourth depression in a little over four decades (the Thatcher depression, the Major downturn, the Cameron catastrophe and now the Johnson slump) will be the worst.
In 2018/19, 508,865 companies were dissolved. This is the largest number of corporate failures since 2009/2010, according to the Office for National Statistics. But a report by Professor John Van Reenen and Peter Lambert suggested the casualty rate in the early part of this year was likely to be three times higher.
The smallest businesses, those with only a handful of employees, are most vulnerable. About one out of every seven companies is likely to collapse, or has already folded.
If all these companies do in fact disappear the report suggests the jobless rate could reach about 3.5m, perhaps even 4m, a total even worse than the depth of the Thatcher depression in 1984, according to ONS figures.
Professor John Van Reenen and Peter Lambert advise a range of measures, including loan subsidies stretching well into 2021, a systematic debt restructuring in the recovery period including exchanging government loans for government equity stakes and new collaboration between government and banks with the latter supporting administration of government lending.
Despite the clear warnings or imminent economic collapse, just as in 2007/8 few, if any, economists are predicting the meltdown, with some (like the Bank of England) painting a rosy economic post pandemic picture.
800,000 businesses at risk of going under: https://www.thesun.co.uk/money/11191813/businesses-risk-going-under-insurance-wont-pay-lost-trade-government-lockdown/
A million SMEs across the UK face going out of business, LSE’s Centre for Economic Performance (CEP) and the Alliance for Full Employment (AFFE)https://www.business-live.co.uk/enterprise/small-and-medium-enterprises/million-small-firms-uk-could-18019652
ONS