ICSM Credit’s Ian Carrotte: if there’s no Covid 19 spike after schools go back the nation needs to regain its sanity and get back to work

ICSM Credit’s Ian Carrotte: if there’s no Covid 19 spike after schools go back the nation needs to regain its sanity and get back to work

As the furlough scheme winds down and businesses reopen there mixed signs of how the economy will shape up this autumn.

Ian Carrotte of ICSM Credit said: “Let’s see where we are in October as by then the kids will have been back at school for a month and many parents will have returned to work. If there’s no real increase in Covid-19 infections then I hope the nation can regain its sanity and come to terms with the illness and start to rebuild the economy.”

CBI Growth Indicator

Private sector activity fell in the three months August, but at a slower pace than last month (-39% from -57%), according to the CBI’s monthly Growth Indicator. This is the second consecutive month where the pace of decline has eased from the survey record low in the three months to June (-71%).

The composite measure, based on 668 respondents (who replied to CBI surveys between 27th July to 14th August 2020), saw business and professional services activity (-32% from -50%), consumer services activity (-64% from -88%), distribution sales (-26% from -47%) and manufacturing output (-46% from -59%) all continue to fall significantly, but at a slower pace than last month.

Looking ahead, the pace of decline is expected to ease once again over the next quarter (-11%): reflected in predictions of a slower fall in consumer services (-42%), distribution (-11%) and manufacturing (-10%). Meanwhile, business and professional services expect business volumes to stabilise in the three months to November (-1%).

Economist Alpesh Paleja of the CBI said: “Clearly, we aren’t out of the woods yet. The next few months mark a crunch point for businesses, with cash flow issues biting, the risk of a second wave and uncertainty over the outcome of Brexit negotiations. A bold plan is needed for all of these issues, in order to establish a sustainable economic recovery.”

Call for more help for business in London

Big Hospitality’s James McAllister: “Hospitality business leaders operating in London have warned that the sector is at 'real risk of failure' unless there is a coordinated campaign to encourage tourists and office workers back. In a letter sent to both Prime Minister Boris Johnson and Mayor of London Sadiq Khan, the businesses demand the two leaders to put politics aside and deliver a coordinated campaign to support businesses reliant in these income streams and help save potentially tens of thousands of jobs. It says that though the Eat Out to Help Out scheme has brought welcome relief to many more businesses in outer London and beyond, there is 'a growing disparity' between central London and the rest of the UK.”

He said that more than 90 businesses including Azzurri CEO Steve Holmes, PizzaExpress managing director Zoe Bowley, and UKHospitality chief executive Kate Nicholls have signed the letter, which calls on the Government and City Hall to collaborate on a campaign that delivers a 'strong and desperately needed message that London is open for Londoners, commuters and leisure visitors'.

Businesses seek help on rents

The Retail Gazette have reported that the BRC, British Property Federation (BPF) and Revo have urged the government to consider the suspension of rent payments during the pandemic. They said the UK’s largest retail trade bodies have reportedly called on the government to launch a Property Bounceback Grant covering up to 50% of commercial rents to keep stores afloat amid the Covid-19 pandemic.

The BRC, British Property Federation (BPF) and Revo have urged the government to consider the suspension of rent payments during the pandemic and to extend the moratorium on evictions, Property Week reported.

Trade association BRC said it did not think the government would be willing to provide rent relief and that it will instead focus on calling for a further extension of the ban on commercial evictions, which is due to end September 20. Meanwhile, BPF and Revo oppose any extension, arguing it would further harm landlords and give tenants an incentive to avoid paying rents.

Ian Carrotte said businesses and landlords needed to work together as they both needed each other. “Nobody gains from an empty factory unit or a boarded up office,” he said, “what’s needed is some realism as the recession is likely to continue for several quarters and both parties need to look at the issue long term.”

About ICSM Credit

ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel - while at the moment there's a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach - ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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