Number of companies struggling financially has fallen since Brexit vote

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2nd November 2016 16:14 - Business Support

Number of companies struggling financially has fallen since Brexit vote: According to the insolvency company Begbies Traynor, the number of businesses in the United Kingdom who are finding it hard to stay afloat has decreased which indicates that the UK’s economy is holding up following the Brexit vote.Number of companies struggling financially has fallen since Brexit vote

In the three months post-EU referendum, the number of companies who reported themselves as in financial distress decreased by 6 per cent on the quarter before, to 248,916. Similarly, the number of companies who reported themselves as in financial distress decreased by 2 per cent compared to the same period in 2015.

Companies in the United Kingdom displayed resilience throughout the UK economy, although, the construction industry displayed the biggest improvement with a decrease in financially distressed firms falling by 11 per cent since the previous quarter. Closely following construction was professional services, which had a decrease of 10 per cent in distressed companies.

The survey findings also confirmed speculations that the dreaded plummet of economic activity as a result of Brexit would not materialise. The UK’s economy’s resilience post-Brexit has been attributed to consumers continuing to spend and provide strength to the services industry.

Some of the surveys conducted after the EU referendum suggested that there would be a plummet in activity; however, warm weather and the recovery from the shock of the exit vote all supported spending by consumers and businesses.

Economists have warned that they still expect a sharp decline that could potentially be prolonged, even if Britain avoids a technical recession of two quarters or more of contraction.

Prime Minister, Theresa May, has announced that she will start the formal separation by the end of 2017. Known as article 50, the separation has been scheduled to commence next year due to divisions over the terms for leaving the European Union in her cabinet.

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