Corporate bad debt pile tops £55 billion
The corporate bad debt pile in the UK topped £55 billion in the first quarter of 2010 according to business rescue specialists Begbies Traynor. The company's latest report suggests that the number of companies in serious financial trouble increased by over 20,000 in the first quarter of 2010 and now tops 161,000. The main concern is the fact that between them these companies owe in excess of £55 billion to suppliers and creditors, much of which may never actually be paid.
This is the ticking timebomb under the UK economy which needs to be addressed sooner rather than later as it could prompt a credit crunch style freeze up behind the scenes of the UK economy. This report casts a very different light on the UK economy which on the surface appears to be recovering but underneath is still experiencing severe financial difficulties. The very fact that the UK banking arena is unwilling or unable to increase liquidity to small and medium-sized businesses at the moment is another major concern.
Until these major debts are wiped out or at least reduced we are likely to see more and more companies struggle in what could well turn out to be a domino effect across many different areas of the UK economy.
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