UK To Record Most Insolvencies Since 2009

England and Wales are on track for the highest quarterly number of company insolvencies since early 2009, as businesses struggle to repay COVID-19 loans against a tough economic backdrop, government figures showed. David Milliken reported for Reuters.

Photo Insert: 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.

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.

In the three months ending June, there were 6,403 companies declared insolvent.

If this figure were 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.

Most company insolvencies were creditors' voluntary liquidations - where directors and creditors agree to wind up a company sans 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.

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