In March, company bankruptcies hit record high levels in England & Wales, since The Insolvency Service started producing monthly records three years ago.
Corporate insolvencies spiked last month, with 2,457 businesses going to the wall.
These figures represent a 16% increase, compared to March 2022. Moreover, when compared to March 2019 (pre-pandemic), company insolvencies have surged by a staggering 55%.
British Businesses Going to the Wall
So far in 2023, there’s been no respite for businesses, as high inflation and low consumer confidence continues to hamper the ailing UK economy.
Throughout the COVID pandemic companies benefited from government support, providing affected businesses with a much needed financial lifeline.
The support enabled hundreds of thousands of businesses to continue operating – and kept millions of people in employment – despite the global economic standstill.
However, with support schemes now mostly over – paired with the fact that repayments for government bounceback loans are due and market conditions are still in the doldrums – a significant number of British businesses find themselves in a financially perilous position.
Small businesses, who typically have unreliable cash flows, are the most susceptible to finding themselves in financial hardship.
To arrest the slide, experts have been urging ministers to push the government to offer further support to SMEs, to avoid more of the UK’s 5.5 million small businesses collapsing.
A growing wave of corporate insolvencies would spell bad news for the economy.
Speaking to the Guardian, the Head of Insolvency at PwC, David Kelly said: “Businesses are struggling to secure financing and pay off their loans due to high interest rates and the wider impact inflation and consumer sentiment is having on sales and cashflows.
“Company insolvencies will likely continue to rise in the short term, making for a challenging spring.”
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