Debt management need may be set to rise as expert warns of ‘recession conditions’

Many businesses are facing "recessionary" conditions, an indication that a full contraction of the UK economy could be imminent, an expert has claimed.

Corporate finance partner at accounting network BDO Peter Hemmington said: "We have had three months data that state businesses think they are in recessionary conditions. The official definition as we know is three quarters. We have got at least a quarter.

"If that continues for another quarter and all indications are that it will, then we will be in double-dip territory."

Mr Hemmington said one notable feature of the latest research from BDO suggesting a recession may be on the cards is a tailing off of recruitment, with the number of people being taken on falling below long-term trends, a development he saw as very significant.

If a new recession is on the way and joblessness is set to increase, this may lead to many people needing to consider debt management plans to help pay off what they owe over a longer period, due to losing the income that would enable them to comfortably finance what they owe.

The comments follow the publication this week of the BDO Group report claiming the gloom felt by companies and general lack of confidence is likely to put the economy back into a recession.

Mr Hemmington had used the publication of the report to call for government action to boost sectors such as construction, through a major programme of public infrastructure projects.

He argued that the low cost of borrowing and recent falls in the cost of construction would make now an ideal time to bolster the country's "ageing transport network".

By Joe White