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Cost of flooding could exceed £1.5 billion


The cost of heavy flooding through the north of England could exceed £1.5 billion according to accountancy firm PwC.

Small businesses and insurance firms will be hit the hardest, and further rainfall could push the total even higher. Consultancy firm HIS has claimed that the flooding and damage caused by storms Eva and Desmond could wipe up to 0.2% of the UK’s economic output this year.

Over the weekend The Environmental Agency issued almost 30 severe flood warnings meaning danger to life in the north-east and north-west of England. There have also been more than 180 less severe flood warnings across England and Wales.

Insurance companies are set to bear much of the total cost of the flooding, somewhere between £700 million and £1 billion of the total cost so far. This will have a detrimental effect on relevant insurers' year-end profitability.

As well as insurers, small, family run businesses are set to be severely effected by the flooding, particularly those who don’t have insurance. The floods will also dent consumer confidence, and might even wipe out some small businesses altogether.

Justin Urquhart Stewart, of Seven Investment Management, said:
"It's not just a money issue, it's a morale issue and that morale is the crucial element to running an economy.
"Something like this can not only knock them back, it can knock them out altogether."

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