UK takeovers fall as economy stutters

According to Grant Thornton LLP, mergers and acquisitions among UK companies will continue to decline over the next 12 to 15 months as the aftermath of the credit crunch continues to be felt.

According to recent data compiled by Bloomberg British, M&A has nearly halved to $372 billion this year.

Ernst & Young ITEM Club also revealed today that the signs are that the UK economy will struggle to avoid recession in 2009. Inflation remains above target and unemployment rises at a time where consumers are having to make many cut backs as the rising cost of credit repayment spending on food and energy is putting more and more pressure on household budgets, which is causing confidence in the UK economy to fall drastically.

Peter Spencer, the chief economist to the ITEM Club, said that in both the high street and in the housing market, the affects of the credit crunch are still being felt although he stipulated that it is likely that things are going to get worse before they get better.

It is also a worry that the Bank of England will continue to take little action as inflationary pressures are increasing, which is harming consumer and business confidence.

The British pound has dropped 12.5 percent in the past 12 months on a trade-weighted basis.

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