Greater than 2,000 UK companies went bust final month, practically a fifth greater than the identical time final yr, based on new figures which make clear the challenges dealing with under-pressure companies.
The extent of firm insolvencies spiked in February with cosmetics chain The Physique Store among the many excessive road manufacturers to break down into administration.
The variety of registered firm insolvencies in February was 2,102, a 17% enhance on the identical month in 2023, information from the Insolvency Service confirmed.
It’s greater than ranges seen in the course of the Covid-19 pandemic, when Authorities assist measures have been propping up struggling companies, and better than pre-pandemic numbers.
It alerts that British companies are nonetheless grappling with robust situations after firm insolvencies hit a 30-year excessive in 2023, with greater than 25,000 companies going bust in the course of the yr.
Development companies confronted essentially the most casualties final yr, because the sector confronted a protracted slowdown amid hovering mortgage prices and supplies inflation.
Somewhat than recent begins, the spring brings with it further challenges for already distressed companies, significantly these within the strained retail and hospitality sectors
David Hudson, restructuring advisory accomplice at FRP
The Physique Store was a high-profile firm to name in directors in February, subsequently asserting the closure of practically half of its UK shops.
The retailer, which was based in 1976, had confronted years of economic struggles amid a more difficult backdrop for consumers.
David Hudson, a restructuring advisory accomplice at FRP, mentioned: “Somewhat than recent begins, the spring brings with it further challenges for already distressed companies, significantly these within the strained retail and hospitality sectors.
“Regardless of hopes of some respite from the Chancellor in final week’s Price range, many will see giant rises of their enterprise charge payments from the beginning of April in addition to having to shoulder elevated wage prices as the brand new Nationwide Residing Wage takes impact.”
He added that regardless of hopes of a short-lived recession, the monetary challenges mixed with greater borrowing prices and weak shopper confidence proceed to “weigh closely” on UK companies.
The UK financial system fell right into a recession on the finish of final yr, based on official figures, which is outlined as two consecutive quarters of adverse development.
However the financial system returned to development in January, elevating hopes that it may already be on its manner out of the downturn.