The number of registered company insolvencies across the UK has reached 1,973, reflecting an increase of 2% compared to August 2024.
Oliver Collinge, Director at restructuring and insolvency firm PKF Littlejohn Advisory Ltd, believes the surge in insolvencies this quarter indicates that more businesses are running out of options.
“Many business owners remain concerned about soft customer demand, continuing cost pressures in some sectors, and the wider state of the economy. High interest rates also continue to be a problem, affecting the cost of existing borrowing, as well as access to funding. The budget will be a significant moment: a possible increase in Employers National Insurance contributions would be an unwelcome development for businesses that are already on the edge.
“With negligible growth (real GDP grew by 0.2% in the three months to August) we anticipate that insolvency numbers will remain high until the economic situation improves.”
Oliver emphasises the importance of early action for struggling businesses: “Businesses must act promptly and seek professional advice if they are experiencing financial difficulties or anticipate cash flow constraints in the short or medium term. Taking early action maximises the options available for ensuring long-term viability, which is vital for the stability and support of SMEs, the backbone of the UK economy.”