Report states that UK bankruptcies increasing
Date
7/22/2024 4:49:07 AM
(MENAFN) The number of bankruptcies in England and Wales has surged to its highest level in over a year, as rising interest rates continue to put pressure on businesses. According to a report released by the United Kingdom’s Insolvency Service on Friday, 2,361 companies filed for bankruptcy last month, marking a significant 17 percent increase compared to the same month in the previous year. This figure represents the highest monthly total since May 2023 and stands as the third highest since records began in 2000.
The construction industry has been particularly hard-hit, with a notable decline in the housing market contributing to financial distress among companies. Between January and May 2024 alone, 1,700 construction firms went bankrupt. Additionally, sectors such as trade, including retail and wholesale, as well as accommodation and food services, have experienced severe challenges due to decreased consumer demand. This has resulted in approximately 3,000 bankruptcies within these industries during the same period.
Mark Supperstone, managing partner at ReSolve, a business advisory and restructuring firm, highlighted the ongoing concerns of high borrowing costs and wage growth impacting business owners. The report attributes these issues to the highest interest rates seen in the UK for over a decade, coupled with high inflation, weak consumer confidence, and escalating operational costs. These economic factors have taken a substantial toll on company finances.
Supperstone also remarked that a reduction in interest rates seems unlikely until later in the year, although there remains some hope for a potential cut in August. The current economic climate continues to challenge business stability, underscoring the broader impact of rising financial pressures on the United Kingdom’s corporate sector.
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