According to official data released on 31 October, corporate insolvencies in England and Wales rose to their highest level since the 2009 financial crisis during the six months to September, with 6208 firms registered as insolvent in Q3 alone. And the number of creditors’ voluntary liquidations reached an all-time high since the introduction of that process in 1960.
Government channels indicate these rises reflect the ending of Covid-19 support schemes, accumulation of debt post-pandemic and high inflation undermining demand. A key factor was also the surge in borrowing costs since the Bank of England started raising interest rates to combat inflation, from a record low of 0.1% in November 2021 to the current 5.25%.
Speaking to the Financial Times, restructuring and recovery services specialist Mark Ford of Evelyn Partners said: “Insolvencies have soared this year against a grim backdrop of continuing cost increases, friction in supply chains and difficult trading conditions, plus a harsh and uncertain macroeconomic environment.”