Recent figures released by the Insolvency Service indicate that company insolvencies in England and Wales rose to 1,878 in February 2026, representing a 7 per cent increase from January.
This rise suggests that many businesses were already under serious financial pressure before the latest economic shocks, as they continue to struggle with high borrowing costs and ongoing inflation.
Analysts caution that the outlook has become even more difficult in recent weeks.
The escalating conflict in the Middle East has driven up global energy prices, raising fresh concerns about inflation.
The increase in oil prices—partly due to disruptions around the Strait of Hormuz—poses a risk of higher operating costs for businesses across the UK, affecting sectors from manufacturing and logistics to retail and hospitality.
As fuel and energy bills continue to rise, many companies that are already operating on tight margins may face additional pressure in the coming months. This raises concerns that insolvency rates could continue to climb.
Giuseppe Parla, Restructuring & Insolvency Director at Menzies LLP, says the increase highlights the fragile position many UK businesses remain in, as new economic pressures begin to build.
“While corporate insolvencies rose in February, the figures underline the ongoing strain many British businesses continue to face following a prolonged period of elevated costs and high interest rates. The data reflects conditions at the time, when there were tentative signs that inflation was moving closer to the Bank of England’s 2% target and expectations were building that interest rates could begin to fall later in the year.
But the economic backdrop has shifted considerably since the end of the month. Escalating conflict in the Middle East has pushed global oil prices higher and raised concerns about disruption to key shipping routes such as the Strait of Hormuz. This has increased the likelihood of renewed inflationary pressure, particularly as higher energy and transport costs begin to filter through supply chains.
Many businesses had hoped the Spring Statement might provide meaningful support, but for large parts of the business community, the measures announced offered little immediate relief.
For companies already operating on tight margins – rising costs and uncertainty could quickly translate into further financial distress. As a result, we could see insolvency numbers continue to rise in the months ahead.
As ever, our message to businesses is clear: act early if you anticipate financial trouble. Doing so ensures that more options remain available to address challenges, protect value and secure a sustainable future for the business.”
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