According to new data, the UK remains on course to register the highest number of insolvencies since 2009 this year. Insolvency figures for September show that UK companies are continuing to struggle with a challenging economic environment.
Insolvency data for September 2023, analysed by PwC shows a total of 1,967 corporate insolvencies during the month, up 17 per cent from the same month a year earlier. While this was down from 2,308 insolvencies in August, PwC’s Head of Insolvency David Kelly said that the firm expected this to be “short-lived” and said the UK was still on track for the highest insolvency figures since 2009.
According to Kelly, economic challenges are continuing to impact businesses across a wide range of sectors, with construction being the worst hit and other key industries, including retail, hospitality and leisure also affected.
Kelly said that the recent pause in interest rates (following 14 straight increases) would be welcome news for many firms seeking to refinance loans. However, he added that refinancing loans would be more expensive and more challenging, which will impact cash flow and profits at these companies.
He added: “Unfortunately, it’s therefore likely that the number of companies falling into insolvency will remain high over the coming months.”
PwC Director of Restructuring and Insolvency Catherine Atkinson, meanwhile, pointed out that compulsory liquidations remained high last month. Creditors issues 469 petitions to wind up companies in September, up from 398 in September 2022 and above 2023’s monthly average of 407.
Atkinson added: “Despite the recent fall in the inflation rate it remains significantly above the long term average. External conditions remain very difficult for many companies who are having to juggle sustained increases in operational costs; worries about consumer demand; and challenging market conditions alongside increased borrowing costs.”
“We expect that insolvency levels will remain high and that creditors will continue to take action to recover outstanding debts by petitioning to wind up struggling companies.”
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