With the political and economic future of the country looking uncertain, many experts fear that another recession could be on the horizon.
The 2008/2009 recession was hard on UK businesses, with almost 27,000 businesses going into liquidation or becoming insolvent, more than in any previous recession.
With recessions usually occurring roughly once a decade, and the last recession ending in 2009, could we be on the verge of another financial collapse?
Last year, The Conference Board’s Leading Economic Index, found that of the 13 economies that it tracks, the UK was the most at risk of plunging into another recession.
Then, just last month, the Office of National Statistics reported that in 2018 the UK economy grew at its slowest rate since 2012.
With forecasts that we could be in for even slower growth in 2019, businesses should be proactive in planning and preparing for an economic downturn.
Current factors that are increasing the risk of a recession include:
- Slow UK GDP growth.
- Uncertainty over Brexit.
- Weak global economy.
- Rising consumer debt.
- Rising corporate debt.
- Trump’s trade war with China.
- Declining property market.
- High inflation rates.
- Rising oil prices.
Whether the predictions of doom and gloom are correct or not, businesses should prepare themselves now for a rocky road ahead to have the best chance of survival in the event of a recession.
Maintaining good cash flow is absolutely essential for any business to survive during an economic downturn. Implement cash flow management strategies now to help your business to continue to grow, even in the face of a difficult economic climate. Identifying potential challenges you may face in the event of a recession can also help you to plan a response to mitigate damage and financial loss later down the line.