Company insolvencies leapt 19.3 per cent in the third quarter compared to the same quarter last year.
Data from the Insolvency Service shows company insolvencies increased 8.9 per cent in the quarter to the end of September compared to the previous quarter.
A total of 4,308 companies entered insolvency in the third quarter, with 3,083 (71.6 per cent) of those creditors’ voluntary liquidations.
A creditors’ voluntary liquidations is instigated by an insolvent company, its assets are sold, the proceeds are distributed to creditors and the company is dissolved.
Duncan Swift, vice president of insolvency and restructuring trade body R3, said: “This is the first time we’ve seen more than 4,000 corporate insolvencies in one quarter since the start of 2014. So far, 2018 has been a tough year for English and Welsh businesses, with insolvency numbers much higher in every quarter than in the same period last year
The construction industry had the highest number of insolvencies in the 12 months ending in the third quarter, followed by the wholesale and retail trade and the vehicle repair sector.
Peter Dean, chairman at finance broker Your Expert Group said: “The six-year high in creditors’ voluntary liquidations could send a bleak message to markets. Not only are banks getting more assertive, but in the current economic climate, many companies are deciding to simply shut up shop rather than see it out.
“Many sectors, not least retail, are evolving at such a pace that legacy companies are simply being left behind and are calling it a day.”
The picture for individual insolvencies looked brighter with the number of individual insolvencies in the third quarter falling 2.5 per cent on the same period last year and 10.5 per cent on the previous quarter.