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The
Insolvency Service, a government agency, said 2,163 companies
were declared insolvent in June, up 27% on a year earlier
although down from May's 2,553, which was the highest since
monthly records began in January 2019.
Over the three months to the end of June, there were 6,403
companies declared insolvent. If this figure is confirmed when
official quarterly numbers are published later this month, it
would be the highest non-seasonally-adjusted calendar-quarter
total since the first quarter of 2009.
"The monthly figures confirm what we are seeing on the ground -
that UK corporates are struggling to cope with a challenging
combination of rising interest rates, sticky inflation, higher
wage expectations whilst recovering from a hangover of Covid
debt," said Gareth Harris, a partner at RSM UK Restructuring
Advisory.
As usual, most company insolvencies were creditors' voluntary
liquidations - where company directors and creditors agree to
wind up a company without a formal court order.
There were 260 compulsory liquidations in June, 77% more than a
year earlier, which the Insolvency Service said partly reflected
more winding-up petitions for unpaid taxes.
However, RSM said it expected the number of insolvencies to fall
by more than 10% by the end of this year, despite rising Bank of
England interest rates which financial markets expect to reach
6% by November, the highest since 2001.
"The drop is likely to come mainly from a fall in 'shut down'
Creditors' Voluntary Liquidations where the catch-up from low
points of Covid and Government support will largely be flushed
out," Harris said.
Britain's government lent businesses 80 billion pounds during
the pandemic and put a temporary hold on many debt proceedings,
which only fully ended in April 2022.
(Reporting by David Milliken, editing by Andy Bruce)
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