Extension of insolvency protection assists directors

The fallout from the pandemic has put pressure on businesses but a range of government measures has offered much needed breathing space. But directors must remain alert to potential cash flow and risk issues, warns Benjamin Wiles, managing director, restructuring advisory at Kroll

The scale of the shock to the UK economy as a result of Covid is now clear following the Chancellor’s Budget. It is now estimated to have reduced gross domestic product (GDP) by as much as 10% in calendar year 2020.

The Office of Budget Responsibility (OBR) is taking an upbeat view predicting an increase in UK GDP of 4% in 2021, followed by around 7% in 2022. On its assumptions GDP could well be back to its pre-Covid level by mid-2022, which is six months sooner than the OBR forecast last November.

While this all sounds like good news, it is still worth recording that GDP under this modelling is still forecast to be 3% lower by 2026 than it would have been if Covid had not happened.

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