“Ticking Timebomb”: 500,000 UK Small Businesses Could Imminently Go Bust
As a stagflationary storm looms over the UK economy, the Federation of Small Businesses (FSB) chairman warned of a tsunami of small business closings without new support packages from the government.
FSB chairman Martin McTague, recently told BBC Radio 4’s Today, “there is still a massive problem with small businesses. They are facing something like twice the rate of inflation for their production prices, and it’s a ticking timebomb. They have got literally weeks left before they run out of cash and that will mean hundreds of thousands of businesses, and lots of people losing their jobs.”
McTague referred to the Office for National Statistics (ONS) data, showing that 2 million (or about 40%) of the UK’s small businesses had less than three months of cash in reserves to support operations. He noted that 10% (or 200,000) were in grave danger, and 300,000 only had a few weeks of cash left.
“It is a very real possibility because … they don’t have the cash reserves. They don’t have any way they can tackle this problem,” McTague said.
FSB chairman’s warning comes as April UK inflation hit 9%, the highest level since 1982. Inflation has been widely sparked not just by loose monetary policy conditions during the virus pandemic but now soaring energy costs as Europe tries to ween itself off Russian fossil fuels and monetary tightening by the central bank.
McTague gave one example of a hotel owner in Scarborough, a resort town on England’s North Sea coast, which had profits wiped out because soaring power bills were five times higher than normal levels.
“They weren’t able to trade any longer without essentially trading at a loss and therefore damaging the future of their business and everybody that worked for them,” he said.
Soaring inflation and faltering growth is a perfect recipe for a stagflationary macro backdrop that is already crushing small businesses and households. ONS data showed the economy contracted by .1% in March, and the economy appears to be sliding into what could be the beginning of a recession.
Meanwhile, Bloomberg data shows the Bank of England is on an aggressive hiking path this summer to quell inflation. Tightening into a downturn will only add even more pressure on small businesses by making lending more expensive and stifling demand.
Recession fears and economic turmoil have sent the pound to a two-year low.
A combination of higher energy prices, a slumping pound, faltering economic growth, a deteriorating environment for small businesses, weak households, trade restrictions on Russia, a central bank that is tightening, and overall inflation at four-decade highs have all produced a toxic environment for the UK economy.
No wonder the UK Misery index is soaring to the highest level since 1994.
Meanwhile, Barclays’ small and medium-sized enterprises barometer shows 75% of British firms are worried about the challenging macro climate and how it could dramatically impact their operations.
- UK Summons Chinese Ambassador Over Beating Of BBC Journalist December 2, 2022
- November Payrolls Preview: A Miss Will Be Good For Stocks But A Huge Miss Means Recession December 2, 2022
- America To Unveil World’s First Sixth-Generation Bomber Friday December 1, 2022
- Why Is Booz Allen Renting Us Back Our Own National Parks? December 1, 2022
- Congress Adds $45 Billion To 2023 Military Budget December 1, 2022
- San Francisco Approves Lethal Police Robots After ‘Unhinged’ Board Of Supervisors Hearing December 1, 2022
- White House “Isn’t Taking A Side” On Cause Of Anti-Lockdown Protests In China December 1, 2022
- Lava Flows From Mauna Loa Volcano Could Reach Major Hawaii Highway “In Days” December 1, 2022
- This Is Of Course Insane December 1, 2022
- Here Are The Best And Worst Performing Assets In November And YTD December 1, 2022
- Railroaders Say Morale, Quality-Of-Life At All-Time Low December 1, 2022
- GOP Senators Say They Will Block Military Funding Unless Vaccine Mandate Scrapped December 1, 2022
- Court Rejects Joe Biden Push to Remove Block on Student Debt Transfer Program December 1, 2022
- Continuing Jobless Claims Hit 10-Month Highs As Layoffs Exploded In November December 1, 2022
- Schiff: Fed Soft Pivot In Play; Markets Ignore Powell’s Hawkish Talk December 1, 2022
- Fed’s Favorite Inflation Signal Dips (Holds Near 40 Year Highs) As Savings Rate Crashed December 1, 2022
- EU Threatens to Ban Twitter Over Elon Musk’s Free Speech Plans December 1, 2022
- Biden Admin Pledges $53 Million To Help Restore Ukraine’s Damaged Power Grid December 1, 2022
- EU Threatens Musk With Twitter Ban Over Content Moderation December 1, 2022
- ‘Operation Pelican’: Details Of UK’s Secret Op To Seize Assange Revealed December 1, 2022
- Not Acxiom (unverified) - 51,730,831 breached accounts November 22, 2022In 2020, a corpus of data containing almost a quarter of a billion records spanning over 400 different fields was misattributed to database marketing company Acxiom and subsequently circulated within the hacking community. On review, Acxiom concluded that "the claims are indeed false and that the data, which has been readily available across multiple environments, […]
- GGCorp - 2,376,330 breached accounts November 8, 2022In August 2022, the MMORPG website GGCorp suffered a data breach that exposed almost 2.4M unique email addresses. The data also included IP addresses, usernames and MD5 password hashes.
- Lolzteam - 398,011 breached accounts November 6, 2022In May 2018, the Russian hacking forum Lolzteam suffered a data breach that exposed 400k members. The impacted data included usernames and email addresses which were later redistributed via another hacking forum. The data was provided to HIBP by a source who requested it be attributed to "ZAN @ BF".
- Doomworld - 34,478 breached accounts October 24, 2022In October 2022, the Doomworld fourm suffered a data breach that exposed 34k member records. The data included email and IP addresses, usernames and bcrypt password hashes.
- E-Pal - 108,887 breached accounts October 24, 2022In October 2022, the service dedicated to finding friends on Discord known as E-Pal disclosed a data breach. The compromised data included over 100k unique email addresses and usernames spanning approximately 1M orders. The data was subsequently distributed via a popular hacking forum.
- Wakanim - 6,706,951 breached accounts October 6, 2022In August 2022, the European streaming service Wakanim suffered a data breach which was subsequently advertised and sold on a popular hacking forum. The breach exposed 6.7M customer records including email, IP and physical addresses, names and usernames.
- Bhinneka - 1,274,340 breached accounts October 6, 2022In early 2020, the Indonesian consumer electronics website Bhinneka suffered a data breach that exposed almost 1.3M customer records. The data included email and physical addresses, names, genders, dates of birth, phone numbers and salted password hashes.
- TAP Air Portugal - 5,067,990 breached accounts September 23, 2022In August 2022, the Portuguese airline TAP Air Portugal was the target of a ransomware attack perpetrated by the Ragnar Locker gang who later leaked the compromised data via a public dark web site. Over 5M unique email addresses were exposed alongside other personal data including names, genders, DoBs, phone numbers and physical addresses.
- Brand New Tube - 349,627 breached accounts September 8, 2022In August 2022, the streaming website Brand New Tube suffered a data breach that exposed the personal information of almost 350k subscribers. The impacted data included email and IP addresses, usernames, genders, passwords stored as unsalted SHA-1 hashes and private messages.
- START - 7,455,386 breached accounts August 30, 2022In August 2022, news broke of an attack against the Russian streaming service "START". The incident led to the exposure of 44M records containing 7.4M unique email addresses. The impacted data also included the subscriber's country and password hash. START subsequently acknowledged the incident in a Telegram post and stated that the data dated back […]