The total amount of money UK companies had in the bank fell by 25 per cent in the 12 months from 2013-14, according to new research carried out by Company Check into the state of UK business following the financial crisis.
On the back of news that the UK economy grew by 0.7 per cent in the second quarter of 2015, the data shows that firms held a total of £1.9 trillion in 2014, down by a quarter from £2.5 trillion in 2013.
The research, which investigated national business performance over four years from 2010-14, analysed cash at bank, assets, liabilities and net worth of all businesses filing accounts in the UK each year.
Total cash at bank was found to have risen year-on-year for four years from 2010, from £1.5 trillion to £2.5 trillion in 2013, before the fall last year.
Meanwhile, the average cash at bank per company, which allows for fluctuations in the total number of businesses each year, was found to be £313,575 in 2014, 25 per cent lower than 2013 (£421,769) and 35 per cent lower than 2012 (£478,488).
Alastair Campbell, founder of Company Check (http://companycheck.co.uk/), said: “This 12-month drop that we’ve identified suggests a significant shift in business behaviour. Less money in bank accounts means more is being spent somewhere, either in investment in capital expenditure, job creation or paying off liabilities as confidence keeps rising.
“As the years from 2010-13 show, many businesses had been choosing to hold on to their money rather than putting it back into the economy for fear of future economic bumps, despite historically low interest rates persisting. Last year however, that all seemed to change and total cash at bank fell.
“So did total liabilities, which dropped from £33 trillion to £25 trillion, numbers which suggest firms are choosing to get their house in order now the economic conditions look more favourable. For those businesses that managed to weather the storm of the financial crisis and emerge relatively unscathed, overall it seems the future’s looking bright.”
The research was carried out by Company Check, the business intelligence website and largest single source of UK company data, during July 2015.
In total, the number of companies filing accounts grew year-on-year from 1.8 million in 2010 to 2.3 million in 2013, before falling back to 2 million in 2014.
The full data set can be downloaded at http://hub-new.companycheck.co.uk/wp-content/uploads/2015/08/UK-PLC-Data-1.pdf .
Visit http://hub-new.companycheck.co.uk/state-of-uk-business/ for more information.
Notes to editors
Company Check (http://companycheck.co.uk/) is the largest source of data on UK companies and attracts three million unique visitors each month who, between them, carry out more than 200 million searches each year for due diligence, checking up on customers and suppliers, researching competitors or tracking their own businesses.
It is the only affordable way for small businesses and consumers to perform credit checks on other companies without a contract or the hard sell. More details and interviews are available on request – contact firstname.lastname@example.org or call Rob Tomkinson on 07723602254/ 0115 242212)