Almost half of UK firms could run out of money within six months, according to data from the Opinions and Lifestyle survey by the Office for National Statistics (ONS). Despite the lifeline provided by the government’s furlough scheme, 44% of firms that responded said their reserves would last for less than six months.
Almost a quarter of businesses (24%) said they were not sure how long their cash reserves would last and 4% said they had no spare cash at all. About 27% said they had cash that would last beyond six months. This comes after more than three-quarters of British applied for the government’s emergency job retention scheme to help them through the coronavirus lockdown.
The ONS said 76% of firms had signed up for the Treasury’s wage subsidy scheme – up from 66% two weeks ago. Of those firms still trading, 72% said they were taking advantage of wage subsidies, rising to 91% for those that were closed.
Prime Minister Boris Jonhson earlier this month announced that lockdown measures are easing this month and businesses will be allowed to reopen from June, many await clearer government guidelines on how UK firms will get through the economic slowdown. Chancellor Rishi Sunak announced this week the furlough scheme would be extended until the end of October but data from the ONS Opinions and Lifestyle survey shows there is a growing feeling it would take time for life to return to normal.
A third (33%) of participants in the ONS Opinions and Lifestyle survey said they thought it would take six months or more for the country to bounce back to its pre-crisis state, but that figure has risen to 46%.
Just over 5,000 firms took part in the ONS Opinions and Lifestyle survey, or about a quarter of total it contacted, and its estimates should be treated with caution when used to evaluate the impact of the coronavirus across the economy.