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‘Bumpy’ recovery for firms in the UK

February 12, 2010 by admin  
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According to a recent report UK firms should be prepared for a bumpy ride to recovery over the course of this year. Despite a fall in the number of profit warnings over the final quarter of last year the accountancy company Ernst & Young has stated that the recovery for UK firms is still likely to b a bumpy and challenging one, and that companies needed to prepare themselves for this.

Officials from Ernst & Young have said that in the final quarter of 2009 only fifty companies issued profit warnings, and this was the lowest level in the last six years. The accountancy firm added that the economy had picked up more quickly than many people had expected it to, but added that this was the year that we would start paying for the recovery. Recent figures have shown that the UK is now officially out of recession, although the growth level was so small that many have speculated that this could turn into a double dip recession.

One spokesperson for Ernst & Young stated: “Growth in the first part of the year could sit in contrast with economic stagnation or even a second dip later on. The events in Dubai at the end of 2009 amply demonstrate how quickly situations can still deteriorate. The coming years could contain more of these shocks”

A number of factors will add to the challenges that companies face over the course of this year. This includes the pay freezes and pay cuts that many workers in the private sector are expected to face, which will affect consumer spending and will have a knock on effect on the economy. Another factor is the fact that the government’s quantitative easing scheme is set to come to an end, and interest rates could start to increase again.

Tags: scheme, Ernst & Young, economics, accountancy, spending, United Kingdom, recession, contrast

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