One of the UK’s leading insolvency experts has warned that company insolvencies will continue to rise as the full impact of high interest rates, energy prices, and inflation has not yet been felt.
The warning comes as latest monthly insolvency statistics for February 2023 reveal were 1,783 corporate insolvencies in, which is 33% higher than February 2020 and 17% higher than 12 months ago.
The worrying upward trend of Creditor Voluntary Liquidations (CVLs) continued in February 2023, with 1,505 compared to 947 in February 2020 – a 59% increase.
Matthew Richards, Restructuring Partner at UK Top 10 accountancy firm Azets, believes we are still not seeing the peak of insolvencies, with consumer facing businesses and the construction and manufacturing sectors most at risk.
He said: “Company insolvencies are continuing to rise as expected. The more concerning trend is rising liquidations, which results in the total loss of trading and jobs.
“Consumer facing businesses and the construction sector are continuing to see the highest levels of insolvency, but we are also now seeing more manufacturing businesses that are unable to pass on their increased costs.
“We expect that insolvency numbers will continue to rise as the full impact of inflation and interest rate rises has not yet been felt.
“It is uncertain yet whether the collapse of SVB and Signature Bank will dent investor confidence in the UK to stifle the availability of credit from smaller banks.”