As Britain assumed its place at the head of the European Union last week, Prime Minister Tony Blair and his ministers flaunted the success of the British economy as a model for lifting Europe out of its current financial quagmire. But just as world leaders flock to Scotland for the Group of Eight summit and all eyes turn to Britain, the signs are the New Labor economic miracle may be about to implode.Earlier in the month, leading business consultancy BDO Stoy Hayward predicted a total of 16,360 businesses would go to the wall this year, an increase of 3 percent on 2004 and an average of 315 a week. That figure would rise 5 percent to 17,236 next year, it forecast. Warning of an "abrupt end" to the British consumer boom, BDO said slower economic growth, increased inflation and higher interest rates were all causing businesses to suffer. However expected interest rate cuts from the Bank of England would ease the pressure on the sector and lead to a drop of 14 percent in corporate insolvencies 2007, it said. The persisting slowdown in manufacturing growth is a further concern.
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