UK Economy shrinks 0.3% in Q1 2012
The UK economy shrank by 0.3% in the first three months of 2012. This is based on the now revised figures from the Office of National Statistics. This therefore means that the UK is in a recession (two periods of non positive growth). There are concerns that in Q2 of 2012 the UK could shrink again and this will once again mean that people will be more careful with their cash.
We will undoubably also see more large companies going into administration and reporting heavy losses (Mothercare today has reported an over £100m loss). HP is cutting 27,000 jobs in the next year and half creating concerns for their employees and meaning more people looking for work. It does therefore mean that if you are not already doing company credit checks on customers, now is the time to start. With a company credit check, you will get a good inidication of whether or not your customers can make payments and also how much credit you should allow them. This will mean you will be able to manage your cashflow and debtors more effectively.