BBC News Online: Business

UK firms urged to prepare for the worst

Workers througout the UK economy still face redundancy threat

Ernst & Young urged businesses against complacency, warning that it was too risky to wait for sales to improve without taking remedial action.

"You may never need to implement these options," Andrew Wollaston, E&Y senior partner, said.

"But planning for them now will give you the flexibility to implement them quickly and effectively if you need to."

Rising level of warnings

The prompt followed the firm's finding that the number of profits warnings issued by UK companies hit 135 in the July to September quarter, the highest since records began four years ago.

Software and computer services firms were the worst hit sector, accounting for 20% of the warnings issued.

E&Y joined other observes in crediting resilient consumer confidence for keeping the UK from recession,

Mr Wollaston urged executives to keep a cool ahead, despite the need to plan for a worsening economic scenario.

"Whatever the length of the current downturn there will be an upturn - no matter how distant it seems on the horizon," he said.

"Companies must manage their businesses very tightly over the next few months if they are to be best-placed to take advantage of opportunities that will arise when the upturn comes."