Half U.K. Firms Foresee Struggles With Debt, PwC Survey Finds
(Bloomberg) -- Over half of U.K. businesses expect to face a cash crunch within a year with recovering earnings failing to keep pace with the weight of debts on balance sheets, according to a survey by consultancy firm PwC.
The poll of 400 British executives found 55% anticipating a liquidity shortfall in the next 12 months with a similar number reporting they’d struggled to service debt payments within the past year.
There was also gloom on the jobs front. While 67% said they foresee revenue returning to pre-pandemic levels within two years, a quarter of respondents expect to reduce headcount in the next year. A third said they already had, according to the report.
Staff cuts could be even higher, meanwhile, as the U.K. government withdraws a jobs support program just as wage costs are rising, PwC said.
The U.K. economy is rebounding with mass vaccinations opening the door for authorities to start lifting Covid restrictions. Economists polled by Bloomberg are forecasting 6% growth this year, the strongest expansion since 1973 and putting it ahead of Germany, France, Italy and Spain. However, the country faces significant uncertainties as it emerges from the pandemic and realigns itself to life outside the European Union trading bloc.
Over half of the respondents to the PwC survey said they experienced Brexit-related disruption in the past year, and a similar amount expect to face it this year. Moreover, 62% of the firms surveyed said they have experienced supply chain disruptions.
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