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UK facing 'flood' of bankruptcies over coming months, says ONS


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UK facing 'flood' of bankruptcies over coming months, says ONS

https://www.theguardian.com/business/2020/oct/28/uk-facing-flood-of-bankruptcies-over-coming-months-says-ons

The Office for National Statistics (ONS) said that 64% of businesses across 
all industries were at risk of insolvency last month, with 43% of companies 
running on less than six months’ cash reserves.

 

Edited by Saving For a Space Ship
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UK facing 'flood' of bankruptcies over coming months, says ONS

https://www.theguardian.com/business/2020/oct/28/uk-facing-flood-of-bankruptcies-over-coming-months-says-ons


The Office for National Statistics (ONS) said that 64% of businesses across 
all industries were at risk of insolvency last month, with 43% of companies 
running on less than six months’ cash reserves.

 

Yep, company insolvency is a lagging indicator. We've also got quarterly commercial rents becoming due at the end of Dec, all into the backdrop of an escalating winter lockdown.

Q1 2021 is going to be an utter shitshow.

 

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I have a feeling there will be a more stringent lockdown but they won't call it a national lockdown so the government don't have to pay as much out to businesses.

I fear for Store Retailers during November and December because as it stands more and more people will shift to online retail.

I'm already hearing that global gdp will not go back to pre covid levels until 2023 /2024.

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I have a feeling there will be a more stringent lockdown but they won't call it a national lockdown so the government don't have to pay as much out to businesses.

I fear for Store Retailers during November and December because as it stands more and more people will shift to online retail.

I'm already hearing that global gdp will not go back to pre covid levels until 2023 /2024.

Quarterly rents are due end of December - that will kill some.

Insurers have taken a kicking at the High Court and have tightened any Business Interruption cover against anything the Government put out.

Further furlough type payments will be tied to either turning up to work or to guarantees

I'd like to see:

An 'enhanced UC' - paying x3 standard rate for 6 months, but only to people with 5 years full time employment history (as shown by Tax and NI).  This shows work pays and that work gives you a safety net.

Zero student visa for 2 years - Fully funded and fee paying students only. F*** uni the business model. No bailout for Uni's, scrap the backdoor underwriting for student loans.

A Wealth poll tax - if we are going to be a haven for the world's dirty money - we are going to charge 10%pa. Don't like it - f*** off and let London Property crash.

 

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There should be no excuse now to not offer targeted support to those businesses that NEED it. i.e hospitality, retail etc.

Not doing what they did before which is offer cash to anyone who ASKED for it.. i.e organised crime, tesco, anyone else

 

The former is orders of magnitude less expensive than what they have done so far.

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Quarterly rents are due end of December - that will kill some.

Insurers have taken a kicking at the High Court and have tightened any Business Interruption cover against anything the Government put out.

Further furlough type payments will be tied to either turning up to work or to guarantees

I'd like to see:

An 'enhanced UC' - paying x3 standard rate for 6 months, but only to people with 5 years full time employment history (as shown by Tax and NI).  This shows work pays and that work gives you a safety net.

Zero student visa for 2 years - Fully funded and fee paying students only. F*** uni the business model. No bailout for Uni's, scrap the backdoor underwriting for student loans.

A Wealth poll tax - if we are going to be a haven for the world's dirty money - we are going to charge 10%pa. Don't like it - f*** off and let London Property crash.

 

The property industry logically should find there is a price to pay in both extolling a "booming market" and at the same time having the begging bowl out.

Any second property owner or absentee owner has to be in the firing line.

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There should be no excuse now to not offer targeted support to those businesses that NEED it. i.e hospitality, retail etc.

Retail was on its knees WELL before any of this.  Targeted bailouts will just protect the CMBS industry to a degree, whilst leaving the businesses with loans they cannot service ... extend and pretend, basically.

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Retail was on its knees WELL before any of this.  Targeted bailouts will just protect the CMBS industry to a degree, whilst leaving the businesses with loans they cannot service ... extend and pretend, basically.

Depends what we are including in retail.

Hairdressers, pubs, etc. etc. Its all well being close to the edge, but pretty harsh to say effectively shut for 5 or 6 months and thats it guys... sorry... that it. 

I agree that mid market fashion, casual dining etc was in trouble before this in a big way.

At some point i.e now they actually need to reform business rates. its lost the plot with reality. 

Shoe zone who reported the other day, now have business rates costing 70% of the rent amount. Its madness to not allocate some of that taxation to online. then add in the VAT avoidance etc.

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Depends what we are including in retail.

Hairdressers, pubs, etc. etc. Its all well being close to the edge, but pretty harsh to say effectively shut for 5 or 6 months and thats it guys... sorry... that it. 

I agree that mid market fashion, casual dining etc was in trouble before this in a big way.

At some point i.e now they actually need to reform business rates. its lost the plot with reality. 

Shoe zone who reported the other day, now have business rates costing 70% of the rent amount. Its madness to not allocate some of that taxation to online. then add in the VAT avoidance etc.

Maybe its a good thing they go bankrupt and start again, afresh?  

Then as you say more sane business rates, saner commercial rents etc .... it cannot go on as is; something has to give.  Even a chartered surveyor I know fully admits CMBS is in a massive bubble.

Throwing more loans doesn't fix that fundamental issue. We're in extend-and-pretend forever otherwise, with the taxpayer on the hook.

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Maybe its a good thing they go bankrupt and start again, afresh?  

Then as you say more sane business rates, saner commercial rents etc .... it cannot go on as is; something has to give.  Even a chartered surveyor I know fully admits CMBS is in a massive bubble.

Throwing more loans doesn't fix that fundamental issue. We're in extend-and-pretend forever otherwise, with the taxpayer on the hook.

The reason why they dont want to go down that route.. is who ultimately owns a lot of this stuff?... Pensions. Meant to be a solid yielding return... ahem. Well not if everything shuts its not. 

They go bust the funds have massive deficits, which either means the core vote of Mrs Miggins losses her pension or the fund is topped up with huge cash calls from the company or what's left of it - screwing over the employees and the economy as a whole.

 

Its a mess. But allowing for a mass crash in commercial property sounds "fun" but unfortunalty its far reaching and really not.

 

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The reason why they dont want to go down that route.. is who ultimately owns a lot of this stuff?... Pensions. Meant to be a solid yielding return... ahem. Well not if everything shuts its not. 

Fully aware, but I don't care tbh and I don't see why my generation and such should bail out your generation's pension pots.  We can't even afford homes, so why the hell should we save your lot?

Sod that.

 

Its a mess. But allowing for a mass crash in commercial property sounds "fun" but unfortunalty its far reaching and really not.

 

See above.  My generation won't have a pension worth its salt by the time it comes around, provided they haven't pushed retirement age into 100 years by then.  

It's about time we faced our demons as a society.

This all smells like extend-and-pretend to me.  Like I said earlier even those in the commercial industry acknowledge its massively overpriced.  

Edited by blackhole
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Fully aware, but I don't care tbh and I don't see why my generation and such should bail out your generation's pension pots.  We can't even afford homes, so why the hell should we save your lot?

Sod that.

See above.  My generation won't have a pension worth its salt by the time it comes around, provided they haven't pushed retirement age into 100 years by then.  

It's about time we faced our demons as a society.

This all smells like extend-and-pretend to me.  Like I said earlier even those in the commercial industry acknowledge its massively overpriced.  

Im under 50 not my generation per say!

Pensions are deeply unfair - see my argument about the nonsense of triple lock elsewhere. They are prioritising increasing pensions regardless despite everything else that is going on.

Just saying it wont happen. Not until almost everything else has collapsed for the same reason.

Whether i want it to happen or think it should happen is a different question to will it happen. Same with house prices which is often forgotten here.

Edited by captainb
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UK facing 'flood' of bankruptcies over coming months, says ONS

https://www.theguardian.com/business/2020/oct/28/uk-facing-flood-of-bankruptcies-over-coming-months-says-ons


The Office for National Statistics (ONS) said that 64% of businesses across 
all industries were at risk of insolvency last month, with 43% of companies 
running on less than six months’ cash reserves.

 

How prices to rise.

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Just saying it wont happen. Not until almost everything else has collapsed for the same reason.

I think it might actually.  You might as well call the current gov "new labour with a blue label" quite frankly.  

For some reason - maybe from not having a proper recession in 2008? - as a country we've seemingly forgotten why the bankruptcy mechanism exists in the first place.  

Now as a society we're absolutely terrified by the concept, when its simply a natural part of the business cycle.

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Whether i want it to happen or think it should happen is a different question to will it happen. Same with house prices which is often forgotten here.

TBH the longer they keep this charade going, the more likely we can kiss all this "wealth" goodbye.

(bring it on - 2021 will make 2020 look like a small dumpster fire, IMHO)

Edited by blackhole
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Retail was on its knees WELL before any of this.  Targeted bailouts will just protect the CMBS industry to a degree, whilst leaving the businesses with loans they cannot service ... extend and pretend, basically.

The government was already running a defecit. Now huge sectors of the economy are being crushed. Tax recipts are going to plumet. The state now has to choice between allowing massive bankruptcies and huge spending cuts and and printing piles of cash to try to bail everyone out. To me it seems clear they are going to go down the Zimbabwe route. Cranking the handle of the printing press to 'save the world'.  People seem to think inflation is an easy way out.

I saw this summary of the situation yesterday.

https://www.youtube.com/watch?v=VnAIYvQVaOQ

'Financial writer John Rubino says expect mass layoffs of city and state workers as deficits explode and tax income plunges. Rubino explains, ““If they can’t pay their bills, they can’t pay their bills. If it can’t happen, it won’t happen. So, you get effective bankruptcy via defaults for a lot of these places. That means massive layoffs of city and state workers and turmoil in the bond market. That kind of thing alone is enough to send the U.S. back into recession assuming we are out of recession when it happens. If you combine this with all the other stuff that will be going on, it is going to be one of those perfect storm scenarios where everywhere you look, somebody is in trouble and demanding a federal bailout. . . . The federal government has a printing press. They can bail out Illinois mismanagement and Chicago mismanagement and basically bail out the politicians who did all of these things. This will come at the cost of the financial markets in general and the currency markets in particular. When they see trillions of dollars in bailouts here and trillions of bailouts there, they will conclude maybe you don’t want to hold the currency of the country that is doing this. Then the U.S. starts looking a lot like Illinois does now, not AAA credit and that is when the debt spiral starts. This causes people to lose faith in the currency, and then it’s game over. . . . There are mass layoffs coming one way or another. It’s just a question of who gets laid off.”

 

Edited by Biggus
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The government was already running a defecit. Now huge sectors of the economy are being crushed. Tax recipts are going to plumet. The state now has to choice between allowing massive bankruptcies and huge spending cuts and and printing piles of cash to try to bail everyone out. To me it seems clear they are going to go down the Zimbabwe route. Cranking the handle of the printing press to 'save the world'.  People seem to think inflation is an easy way out.

I saw this summary of the situation yesterday.

https://www.youtube.com/watch?v=VnAIYvQVaOQ

Not just the UK, but the USA and EU are keeping their economies alive through sheer printy print / QE.  "Markets" are now addicted to constant stimulus. 

Writing's on the wall as you say.

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For some reason - maybe from not having a proper recession in 2008? - as a country we've seemingly forgotten why the bankruptcy mechanism exists in the first place.  

Now as a society we're absolutely terrified by the concept, when its simply a natural part of the business cycle.

I totally agree. There is virtue in crisis. But people are too afraid of having to change their ways, moral hasard has been the name of the game for over a decade. Not a very nimble and capitalistic society. Add to this how the rulers and central bankers confuse the thermometer for the weather with the stock market, we will be in for a treat for the next few decades. 

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No doubt a significant number of those 50k loans going with it. A bit of time and a bunch of phoenix companies popping up.

Sure lots of loopholes around, business will find ways of avoiding paying what owed back.....write it off and start again......rip it off and start again, Orange Juice.;)

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A Wealth poll tax - if we are going to be a haven for the world's dirty money - we are going to charge 10%pa. Don't like it - f*** off and let London Property crash.

 

How, at What level of wealth, and what would be classed as wealth? 

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Feeling nervous?

Actually I think it is a legitimate question ( although you may be directing it based on prev interactions with poster).

If you exclude property and other assets then it is a bank balance tax.

Include property is it based on % equity in property? Do we revalue everything or just go off council tax band?

If the level is set too low watch as people spaff their savings on smartwatches and stuff not included.

Set too high and achieves bob all as a Sheikh with a swish accountant claims he has less cash than the average benefit claimant...

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Feeling nervous?

No, just curious what you consider "wealthy" , what you would tax, and how.  My family is probably in the top 20% of the country by household income, assets and "net" wealth, but i don't consider us "wealthy", we are not millionaires. 

Compared to my younger brother, who is still at home with mum in his 40's, in and out of work, spends most of his free time playing PC and video games, has a banger for a car, has little savings, owns zero property or investments, but doesn't have debt to speak, His net wealth at best, i would say is £10k, ours would be approaching 100x that, the wife's 15k p/a now frozen final salary pension alone is worth £££ lots! 

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  • 439 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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