Downturn ‘will create new businesses’

The economic recession could prompt a wave of new businesses that will create jobs and help fuel a recovery, according to an upbeat assessment by insurance company Hiscox.

The insurer believes that announcements by the government offering companies cash for training the long-term unemployed and guaranteeing bank loans to small firms will encourage those made redundant to start up their own company.

"Research we carried out last year indicated that 20% of UK entrepreneurs started their business as a result of being made redundant," said Gary Head, SME expert at Hiscox.

"A silver lining of this current downturn is that more people being made redundant will decide that now is as good a time as any to try and make a success out of that business idea that they've long had on the back burner."