Shocking increase in business insolvencies
According to recently released statistics there has been a rise in business insolvencies. The alarming rise has seen a 70% increase, jumping from 11,261 to 19,191 in the last year
Experts suggest that the highest interest rates in 13 years have made businesses’ debts more expensive to service and has led to an even greater number of indebted businesses falling into insolvency.
It is thought a number of businesses have shifted much of their borrowing to fixed rate loans and had this not been the case, the financial impact on business as a whole could have been even greater.
With interest rates rising for the fifth consecutive time in June, the economic outlook for business is bleak. Businesses have suffered a double blow from inflation as their own operating costs are rising sharply and consumers are cutting back on spending. Latest figures show UK inflation hit a 40 year high of 9% in April and this is expected to rise to more than 11% by October.
A good number of businesses are struggling to navigate themselves through difficult times with the added worry of falling consumer spending and rising energy prices. We are seeing businesses being forced to increase their prices despite consumers feeling the pinch.
Many businesses that were already struggling are now facing a real crisis. The financial support that the Government provided during the pandemic has now ceased and the UK economy appears to be seeing some of the post covid wave of insolvencies which were feared. These latest insolvency figures will still cast greater uncertainty over some businesses.
One way to deal with financial pressures is to make sure your invoices are paid. Cash flow and profitability are the lifeblood of any successful business and in today’s environment this means that the prompt recovery of debts is vital.
If you are struggling to get your invoices paid, please contact a member of our dedicated debt recovery team.
Any queries concerning this article, please contact Allison Thompson on 0191 2267878.