A NEW report from a consultancy firm claims that hundreds of county businesses are in 'significant financial distress'.

The report, commissioned by Begbies Traynor, analyses the financial performances of businesses across the first two quarters of 2019.

Weak consumer spending and ongoing economic and political uncertainty have been named as reasons for the findings of the report, which said there are now 906 businesses struggling with their finances.

While Worcester saw a one per cent decrease in the number of businesses struggling between Q1 and Q2 2019 some sectors, particularly the professional services sector, fared worse.

The report comes from data used in the 'Red Flag Alert' for Q2 2019, which monitors the financial health of UK companies, and revealed that nationally, 484,000 UK businesses are in significant financial distress, and the average company debt has increased by 122 per cent in the past three years to £66,000.

When looking at sectors in Worcester that are in financial difficulty, businesses in the professional services, real estate and property sectors have seen the biggest gains, increasing six per cent and four per cent respectively between Q1 and Q2 2019.

Brett Barton, partner at Begbies Traynor in Worcester, said: "This latest Red Flag Alert shows the desperate need for political and economic clarity, as businesses continue to be hit hard, with real estate & property companies most affected by the weakest consumer spending since records began in the mid-1990s.

"In addition, the national figure of average company debt shows that any gambles taken on debt could hit companies hard if power doesn’t return to the pockets of consumers soon.

"We have to remember that while an average debt of £66,000 won’t seem much to a multi-million-pound company, this can be a significant amount for SMEs, which are the engine room of both Worcester and the wider UK economy."