The number of firms going bust in England and Wales has increased by 18% in October compared to the same period last year.
The higher-for-longer interest rate environment and weak consumer spending have put pressure on businesses and consumers. Out of the 2,315 insolvencies recorded, 82% were creditors’ voluntary liquidations (CVLs), where directors choose to wind up an insolvent company.
The figure reflects the ongoing struggle of UK firms, particularly smaller owner-managed companies, in sectors such as engineering, business services, hospitality, and leisure.
David Kelly, head of insolvency at PwC, stated that corporate balance sheets remain fragile due to supply chain pressures, energy costs, inflation, and high debt.
Matthew Richards, a partner at Azets, expects insolvency numbers to remain high in the coming months, especially in the construction, real estate, hospitality, retail, and leisure sectors.
