AG百家乐在线官网

Rise in number of firms going bust, Insolvency Service says

Company insolvency levels remain much higher than those seen during both the COVID-19 pandemic and in the years following the 2008/09 financial crisis, officials say.

A woman walks by a shop advertising its closure in Croydon, south London, Friday, Jan. 23, 2009. The British economy has officially sunk into recession, with government figures Friday showing the economy shrank 1.5 percent in the fourth quarter of last year as the financial crisis ravaged banks, retail and manufacturing. It was the biggest decline since the early days of Margaret Thatcher's government nearly 30 years ago. (AP Photo/Sang Tan)
Image: File pic: AP
Why you can trust Sky News

The number of firms in England and Wales going bust last month rose by 16% year-on-year, according to official figures.

Commentators said the 2,191 company insolvencies in July showed how many businesses were still recovering from the impact of high inflation and borrowing costs despite growing optimism about the UK's economic outlook.

The figure was 7% down on June's total, but insolvency levels remain much higher than those seen during both the COVID-19 pandemic and in the years following the 2008/09 financial crisis, officials said.

Rebecca Dacre, a partner at advisory firm Forvis Mazars, said the data was "a strong reminder that many businesses are still a long way off from recovery".

She added: "Despite initial signs of improvement in the economy, some sectors are still experiencing severe difficulty as interest rates remain high.

"Falling consumer spending during the cost of living crisis has also made it incredibly difficult for some businesses to survive. The retail and hospitality sectors have borne much of the brunt... unless we see a stronger economic recovery, it is likely we will see more companies pushed towards insolvency."

Sarah Rayment, head of global restructuring at finance firm Kroll, said there was no need for "alarm" because "looking at the big picture there are reasons to be cheerful".

She added: "However, green shoots do not immediately translate into good news for all companies. Borrowing costs are still high and many companies are looking to refinance in the coming months.

"The question is whether they will have enough financial headroom with higher borrowing costs or whether their lenders will give them enough leeway. It is perhaps more likely that we will see more restructuring activity."

Read more from business:
Search continues for Mike Lynch

Airport loses bid to overturn flight restrictions
Hobbycraft on brink of sale

Be the first to get Breaking News

Install the Sky News app for free

The seasonally adjusted figures, from the Insolvency Service and Companies House, include 320 compulsory liquidations, the highest monthly total since before the pandemic.

Meanwhile, individual insolvencies rose by 24% year-on-year in July, separate official figures showed on Tuesday.

The total of 10,524 was similar to June's figure, and included 634 bankruptcies, 4,163 debt relief orders and 5,727 individual voluntary arrangements. However, levels remain below those seen during the pandemic.