England and Wales report highest number of company insolvencies since 2009
2023.07.28 05:23
© Reuters. FILE PHOTO: People walk through Greenwich Park, with the Canary Wharf financial district in the distance, in London, Britain, April 6, 2023. REUTERS/Henry Nicholls/File Photo
LONDON (Reuters) -England and Wales saw the highest number of company insolvencies since 2009 during the second quarter of this year, government figures showed on Friday.
On a seasonally adjusted basis, 6,342 companies were registered as insolvent in the three months to the end of June, 13% more than a year earlier and the highest since the second quarter of 2009, the official Insolvency Service agency said.
Insolvencies slumped in Britain during the COVID-19 pandemic, as businesses benefited from 80 billion pounds ($102 billion) of support loans and a ban on court-ordered liquidations, which only fully ended in April 2022.
Many small businesses have struggled to repay these loans, and also face challenges from much higher Bank of England interest rates – which hit a 15-year high of 5% in June – as well as a big rise in energy bills and staffing costs.
The most common form of insolvency – creditors’ voluntary liquidations, where directors agree to wind up a company without a formal court order – rose to the highest since records began in 1960, at 5,240.
The number of compulsory liquidations, 637, was still below that seen before the start of the pandemic.
Insolvency was most common in construction, wholesale and retail, and hospitality, though this partly reflected the high numbers of businesses in these sectors.
In Scotland, which has different insolvency laws to England and Wales, company insolvencies were 25% higher than a year ago.
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