Business Insolvencies rise in September
Business insolvencies continue to rise
The latest number of businesses that failed was the largest since the beginning of the pandemic, according to data released by the Insolvency Service.
A total of 1,446 company insolvencies were registered during September, an increase from 1,349 recorded in August and 56% higher than the same month last year.
Nicky Fisher, Deputy Vice President of insolvency and restructuring trade body R3, said “The insolvency statistics published today show the economic effects of the pandemic are continuing to take a toll on businesses and consumers.”
“The dramatic increase in corporate insolvencies compared to this time last year – to the highest level since January 2020 – illustrates just how crucial the Government’s support has been in keeping businesses afloat and suggests that there may be a rocky road ahead for the business community now it has ended.”
September saw many firms contend with rising energy and labour costs and the easing of Covid government support. Already a number of Energy firms have failed as companies struggle with the price of wholesale gas prices.
There is concern that the rising energy costs will affect other industries. Claire Burden, a partner at professional services firm Tilney Smith & Williamson, said the ongoing energy price rises will "reverberate into additional sectors" and push more companies such as those in manufacturing and consumer goods into financial strife.
"This will cause further failures when combined with existing pressures of increased transport costs and supply issues," Ms Burden added.
The Bank of England recently stated that one third of small businesses in the UK are classed as "highly indebted", where their debt levels are more than 10 times their cash balances.
