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May 20, 2021

UK businesses to collapse as winding up prevention ends – leading macroeconomic influencers

Covid-19 emergency measures that prevented winding up petitions are due to expire in June, risking a wave of failures of companies.

Economists believe that companies struggling to pay their debts and rents due to the pandemic should be supported by HMRC and ministers.

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Richard Murphy

Richard Murphy, a political economist and visitor professor of accounting at the Sheffield University Management School, shared an article on economists trying to warn about inflation.

However, with a dominant Covid-19 variant and existing coronavirus support ending, an economic downturn is expected as households and companies hit the economic wall.

Business groups have cited concerns over the risk of a wave of bankruptcies, as temporary Covid-19 emergency measures that prevented the use of winding up petitions are expected to end next month. They believe that the UK tax authority should work towards helping companies that have been struggling to repay over a year’s worth of rent and other debts during the pandemic.

The UK’s professional organisation for company directors, entrepreneurs, and senior business leaders, the Institute of Directors (IoD) and R3 have written to Kwasi Kwarteng, the business secretary, urging him to work with Her Majesty’s Revenue and Customs (HMRC) to help businesses at the brink of collapse.

Jacques Sapir

Jacques Sapir, an economist and a specialist in Russia and Euro monetary issues, retweeted on the Covid-19 disease being the main worry for Russia in 2020. However, as the pandemic has gradually started receding this year, Russians are faced with a new problem of rising prices and low wages and income.

According to a new poll, even though Russians felt less stressed than last year when the virus hit, money was still a huge cause of concern today with respondents worried about inflation and low salaries. The poll revealed a significant drop in stress since 2020, with 55% of the respondents being worried rather than 79% who felt the same way last year.

Among most common concerns related to finances, the poll found 62% of the respondents to be stressed by rising prices and inflation, 56% to be stressed over their low wages, and only 30% expressed were worried about the economy in general. Russia’s Ministry of Economic Development revealed that the country had reported growth for the first time in April this year since the Covid-19 outbreak.

William E Spriggs

William E Spriggs, chief economist for the AFL-CIO and professor of economics at the Howard University, retweeted a discussion on the work from home scenario or a hybrid model induced by the pandemic having ripple effects across regional labour markets, commercial real estate, and also impacting where workers would want to live.

Spriggs believes that the big challenge is to get transportation to provide reliable services so that both transit workers and passengers feel safe to travel to work and back in downtown Washington, D.C. Additionally, there would be an increasing challenge to impose the mask mandate in public transport systems, with nurses and transit workers raising concerns over people not conforming to these safety protocols that are part of the overall recovery efforts.

 

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Navigate your business through the ‘new normal’

COVID-19 continues to dominate headlines the world over. It has already affected our lives forever. The way we work, shop, eat, seek medical advice, and socialize will all be different in the future. Quite how different remains to be seen, but all industries must plan for multiple eventualities.  Faced with an explosion of conflicting information on how to plan and implement successful recovery strategies, decision-makers are in dire need of a single, reliable source of intelligence.   GlobalData’s COVID-19 Executive Briefing gives you access to unparalleled data and insights to successfully navigate the uncertain road to recovery across the world’s largest industries. Understand every aspect of this disruptive theme by delving into: 
  •  COVID-19 infection update, with statistics on the spread, testing by country, as well as the latest data on vaccines and therapeutic developments 
  • Economic impact overview, covering stock market indices, GDP, unemployment rates, policy responses & GlobalData’s economic recovery scorecards 
  • Sector developments, with access to sector insight summaries, cross-sector indices and the leaders and laggards in each industry vertical 
Whatever your company’s imminent strategic plans, the long-lasting impact of COVID-19 must not be overlooked. Find out how to futureproof your business operations – download our report today. 
by GlobalData
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