BUSINESSES need to adapt to a “new normal” of little or no growth rather than waiting for economic recovery, according to a corporate rescue specialist.
Ken Pattullo, group managing partner for Scotland at Begbies Traynor, also argues that sectors such as pubs and high street retailers will continue to struggle this year due to oversupply issues.
“People and businesses have got into a mindset of spending based on cheap credit and are waiting for those days to return,” said Pattullo.
“Without a major catalyst, there is no reason to expect those days to return at all, which is why the economy won’t change significantly for a few years.”
Pattullo said the scale of austerity cuts still to hit the public sector was a factor in a prolonged period of stagnation or minimal growth.
“The economy needs a new generation to come through, a generation that recognises the current situation as the new normal and works on that basis rather than planning for the day that growth returns.”
As well as continuing high levels of business failures, Pattullo said there were also a lot of “zombie companies” which were only just surviving.
He believes the only exception to the gloomy outlook across the UK will be in South-east England where growth is predicted.
“We are already seeing a two-speed economy, with latest statistics showing early signs of growth in London and the South-east while the rest of the UK is stagnant,” he said.