Figures from the Insolvency Service shows that company insolvencies hit a 30-year high last year due to a combination of “interest rates” which are at levels not seen in over a decade.
The number of companies across England and Wales that collapsed in 2023 hit 25,158 up by 14% compared to 2022.
The number of creditors’ voluntary liquidations (CVLs) rose by 9% to 20,577 which is the highest number since records started in in 1960.
Company liquidations hit 2,827 up 44% from 2022 and there was a rise in administrations of 1,567 and a 67% rise in company voluntary arrangements (CVAs).
Experts are warning that 2024 will be another hard year for British businesses.
Julie Palmer, partner at insolvency specialist Begbies Traynor, said: “Thousands of businesses have been pushed into insolvency due to a combination of interest rates at levels we haven’t seen in over a decade, pushing the cost of borrowing up, alongside inflation, weak consumer confidence and rising input costs – a perfect storm for financial distress.
“With more businesses entering insolvency in 2023 than during the financial crisis, economic conditions must improve quickly, otherwise the fight for survival in 2024 might be a step too far for the battered and debt-laden businesses that managed to survive last year.”
Restructuring expert Mark Ford, at professional services firm Evelyn Partners, said: “While in terms of interest rates and prices the general feeling might be that the worst is over, the trading environment for businesses in the UK remains pretty onerous.
“We can expect the costs environment for some firms to become more challenging, particularly but not exclusively in construction, retail, leisure and healthcare sectors.
“It also looks like the crisis in the Middle East might start to choke supply chains, lengthen lead times and possibly restrict the supply of imported materials and components.”