PKF expert says key economic changes are the best chance for recovery
A leading voice in corporate recovery from PKF in East Anglia has said key economic changes are needed in order to give the UK economy a chance for recovery.
David Merrygold, corporate recovery partner at the accountants and business advisers, which has offices in Ipswich, Great Yarmouth and Norfolk, made his comments after the Governor of the Bank of England gave a bleak view of the economy in his speech at London's Mansion House last night.
Mr Merrygold said Mervyn King was spot on when he said the UK faces its "most difficult economic challenge for two decades".
"Changes such as tax cuts, taking duty from fuel and preventing profiteering at utility companies are some examples," he said.
He continued, however, by adding that "the Olympics has the potential to lift the economy as it will bring with it the feel-good factor".
Mr King said in his speech that real take-home pay would "stagnate" but Mr Merrygold said employers would feel tough pressure from employees over this: "The fuel transport drivers have just succeeded in gaining a 14% increase in pay and I can see other employees leaning on employers to increase their wages, too.
"With rising inflation, fuel costs, food, gas and electricity, consumers will want increases in pay to help fund these costs, but employers will only be able to do this if they experience increases in sales.
"Some employers will not be able to afford it. Already this week I have been in talks with two firms that are going to go under. Both cannot make ends meet.
"One has experienced a drop in sales of 50% and cannot cut its costs any further. The other is a club that has suffered losses because of the smoking ban and is finding that customers are just not spending money like they once did. Inevitably, they too, will have to close.
"What they are experiencing is symptomatic of what is happening across the country."