Politics

Four in ten UK businesses are down to less than six months of cash reserves, worrying figures reveal


FOUR in ten businesses in the UK have less than six months of cash reserves left, in an alarming sign of the looming economic crash.

Only three in ten firms said they had cash reserves to cover beyond six months, while a quarter were unsure according to the latest Office for National Statistics survey on the impact of the coronavirus crisis on the economy.

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 Four in ten businesses have less than six months of cash reserves left due to the Covid-19 pandemic

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Four in ten businesses have less than six months of cash reserves left due to the Covid-19 pandemicCredit: Getty – Contributor

It also found that eight in ten companies in the UK have used the Government’s wage support scheme.

Around one in seven businesses that paused trading when lockdown was introduced in March said they are intending to restart trading in the next fortnight.

But on average, only a third of their workforces are expected to return from furlough leave.

The job retention scheme currently sees the state paying 80 per cent of furloughed workers’ salaries.

But from August, employers who continue to furlough workers will have to contribute 20 per cent of their wages and also pay towards their National Insurance employer contributions and pension contributions.

Mr Sunak is expected to announce the details of how the job retention scheme will work beyond July over the next few days.

Treasury figures released earlier this week revealed 8.4 million jobs are currently furloughed from 1 million employers, at a cost of £15 billion to taxpayers.

Mr Sunak has said firms will be allowed to furlough staff part-time from August.

He could bring this flexibility in sooner if industries like pubs and restaurants are allowed to open earlier than expected.

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