Report: UK bankruptcies "spiking"
Bankruptcies in England and Wales reached their highest level in over a year last month, driven by elevated interest rates. Read Full Article at RT.com
TroibNews 
Bankruptcy filings in England and Wales have soared to their highest in over a year as increased interest rates strain corporate finances, the UK’s Insolvency Service reported on Friday.
The data indicated that 2,361 companies ceased operations last month, marking a 17% increase from the same period the previous year. This count is the largest since May 2023 and ranks as the third-highest month on record since 2000.
The construction sector has been hit hardest, influenced by a slowdown in the housing market. From January to May 2024, around 1,700 construction firms declared bankruptcy, according to the data provided.
Additionally, the retail and wholesale sectors, along with accommodation, food services, restaurants, and bars, also experienced significant downturns due to reduced consumer spending, resulting in approximately 3,000 bankruptcies.
“High borrowing costs and wage growth are still very much a concern to business owners,” stated Mark Supperstone, managing partner at ReSolve, in an interview with Bloomberg.
With interest rates at their highest in more than a decade, the financial burden on businesses has increased, exacerbated by high inflation, dwindling consumer confidence, and elevated operational costs.
“A drop in interest rates is now perhaps unlikely to take place until later this year, although there is still hope of a reduction in August,” added Supperstone.
The rise in business insolvencies has been noticeable since the termination of government support programs instituted during the Covid-19 pandemic, with current levels surpassing those seen pre-pandemic, the Insolvency Service report elaborated.
James del Carmen for TROIB News
The data indicated that 2,361 companies ceased operations last month, marking a 17% increase from the same period the previous year. This count is the largest since May 2023 and ranks as the third-highest month on record since 2000.
The construction sector has been hit hardest, influenced by a slowdown in the housing market. From January to May 2024, around 1,700 construction firms declared bankruptcy, according to the data provided.
Additionally, the retail and wholesale sectors, along with accommodation, food services, restaurants, and bars, also experienced significant downturns due to reduced consumer spending, resulting in approximately 3,000 bankruptcies.
“High borrowing costs and wage growth are still very much a concern to business owners,” stated Mark Supperstone, managing partner at ReSolve, in an interview with Bloomberg.
With interest rates at their highest in more than a decade, the financial burden on businesses has increased, exacerbated by high inflation, dwindling consumer confidence, and elevated operational costs.
“A drop in interest rates is now perhaps unlikely to take place until later this year, although there is still hope of a reduction in August,” added Supperstone.
The rise in business insolvencies has been noticeable since the termination of government support programs instituted during the Covid-19 pandemic, with current levels surpassing those seen pre-pandemic, the Insolvency Service report elaborated.
James del Carmen for TROIB News
