Tight lending conditions continue to threaten UK recovery
A newly published research survey from Roland Berger Strategy Consultants shows that the economic crisis is far from over. The critical liquidity issues in UK business, which have characterised the downturn, have not eased and combined with the lack of restructuring in 2009 will threaten the UK’s return to economic growth in 2010
This survey was conducted with UK board members to gauge the continuing impact of the economic crisis on major UK companies and to gain an understanding of the opportunities arising from potential recovery.
“The impact of the economic crisis is still clearly evident across UK companies with business sentiment reflecting the uncertainty of austerity measures and ongoing market turbulence”, said Klaus Kremers, the author of the study and Restructuring Partner of Roland Berger Strategy Consultants UK. “Our research proves it is clearly going to be another difficult year as companies that cut costs insufficiently in 2009 now realise that they need to take significant measures in 2010 to manage their liquidity. This could impact their potential to fully harness the recovery and take advantage of any opportunities that arise.”
Klaus Kremers added, "With uncertainty over the bottoming out of the crisis and timing of recovery, the imminent UK Budget has the potential to greatly impact the fragile state of most UK companies. If the Budget delivers higher tax and VAT rates, which most of the surveyed companies are expecting, then the level of consumer spending would be reduced further, greatly impacting the speed of recovery. Companies could need to further address their cost base and ensure it is as flexible as possible."
The findings of the study can be downloaded from the link to the right.
This survey was conducted with UK board members to gauge the continuing impact of the economic crisis on major UK companies and to gain an understanding of the opportunities arising from potential recovery.
“The impact of the economic crisis is still clearly evident across UK companies with business sentiment reflecting the uncertainty of austerity measures and ongoing market turbulence”, said Klaus Kremers, the author of the study and Restructuring Partner of Roland Berger Strategy Consultants UK. “Our research proves it is clearly going to be another difficult year as companies that cut costs insufficiently in 2009 now realise that they need to take significant measures in 2010 to manage their liquidity. This could impact their potential to fully harness the recovery and take advantage of any opportunities that arise.”
Klaus Kremers added, "With uncertainty over the bottoming out of the crisis and timing of recovery, the imminent UK Budget has the potential to greatly impact the fragile state of most UK companies. If the Budget delivers higher tax and VAT rates, which most of the surveyed companies are expecting, then the level of consumer spending would be reduced further, greatly impacting the speed of recovery. Companies could need to further address their cost base and ensure it is as flexible as possible."
The findings of the study can be downloaded from the link to the right.
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