Though much has been said about the danger of a recession hitting the U.S. – to the point that even the International Monetary Fund (IMF) highlighted its most common topic of contention – it is far from the only advanced economy to find itself at risk in 2024.
Unlike the United States, which has enjoyed robust economic growth despite various pressure points such as high inflation, Europe has been going through a period of slow economic activity caused by protracted austerity and the effects of the energy crisis that emerged from the sanctions imposed on Russia.
On the continent, the United Kingdom has the dubious honor of hosting one of the highest percentages of distressed companies, with as much as 9.9% being affected, according to recent studies conducted by the consultancy firm Alvarez & Marsal.
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The situation becomes only more worrisome once the fact that such a high percentage of corporate distress has not been recorded since the Great Recession a decade and a half ago.
Additionally, out of the entire Europe, only the combined markets of the Netherlands, Belgium, and Luxembourg – the Benelux Countries – has a higher percentage at 10.2%.
The most recent figures come at the heels of various reports depicting the gravity of the situation in Europe. In February 2024, surveys also conducted by Alvarez & Marsal found that almost 10% of all firms in Europe are in distress.
Can Britain escape the economic gutter?
Still, the U.K. has been particularly in the news over a series of economic woes that have been affecting the country for years. Along with the general cost-of-living and prosperity crisis – perhaps best exemplified by the food bank boom of post-2008 Britain – the kingdom also suffers from the impact of the energy cost surge.
Additionally, systemic mismanagement and budgetary constraints placed on local governments have led to an apparent epidemic of local council bankruptcies with the largest affecting Birmingham – a city of over 1 million people.
Finally, the danger for the U.K. appears especially pointed given that the country has been described as having developed investment phobia at a time when some experts believe significant investments are desperately needed – and at a time they are not likely to come with Labour significantly stripping its once-extensive manifest toward Tory-like austerity.
