Double-dip recession fears may increase insolvency advice demand

Growing numbers of UK small businesses could be forced to seek out insolvency advice if mounting fears over the prospect of a double-dip recession turn out to be justified.

On the back of continued uncertainty over the health of the British economy, as well as the state of several European economies, the British Chambers of Commerce (BCC) has reported growing unease among smaller enterprises the length and breadth of the country.

Indeed, according to the organisation, of the 6,700 small firms it polled for its latest research paper, a significant majority stated that cashflow – or a lack of it – remains a real concern.

What's more, with businesses looking to events in Europe with mounting trepidation, many firms are growing convinced that the UK economy will slip into a double-dip recession, an outcome that could lead to thousands of small business owners seeking out the help of specialist insolvency services.

Commenting on the findings, BCC director-general John Longworth explained that the pace of growth within the UK economy is likely to "remain slow" for the foreseeable future, though a second major slump is by no means inevitable.

"We can avoid a recession but this relies on the government making some tough policy choices," he said.

"While it is imperative that the government perseveres with its deficit-cutting plan, there must be a significant reallocation of priorities within the overall spending envelope."

This comes just days after the Federation of Master Builders (FMB) warned of tough times ahead for UK construction firms.

According to the industry body's director of external affairs Brian Berry, the government's cutbacks, allied with the reluctance many Britons have over taking on mortgage debt and buying a new property, means that many firms in the sector are likely to have to endure a difficult time over the coming months.