Insolvencies surged in November, confirming 2023 is set to be the worst year for corporate collapses since 2009
Insolvencies surged in November, confirming that 2023 is set to be the worst year for corporate collapses since 2009, according to the latest data from the UK Insolvency Service today.
The number of insolvencies in November was 2,466, a 21 per cent increase from the same month in the previous year.
The increase in insolvencies — a number that is also higher than pre-pandemic levels — was mostly driven by 1,962 creditors’ voluntary liquidations and 359 compulsory liquidations.
Nicky Fisher, president of R3, the UK’s insolvency and restructuring trade body, said today’s figures bring the corporate insolvency figures to the highest annual total since 2009 — at the height of the financial crisis.
“The fact that corporate insolvency numbers have reached a 14-year high is partly because of the COVID hangover, which was a result of insolvency numbers being suppressed by Government support measures, but also as a result of a relay of economic issues that have taken their toll on businesses,” Fisher said.
“Since the spring of 2020, firms have had to contend with the pandemic, the end of the Government support measures, rising inflation, the cost of living crisis, and supply chain issues – with no time to draw breath or recover in between them.”
Inga West, counsel at Ashurst, said small and medium-sized enterprises (SMEs) could be taking the hit the most.
“Total company insolvencies are dramatically up on last November, but once again these numbers are being driven by creditor voluntary liquidations and compulsory liquidations, which indicate that the pain is still being felt most acutely by SMEs,” West added.
While the number of insolvencies for larger companies remains “generally flatter”, West said, the overall figures highlight recession vulnerability.
“Despite a sustained fall in the rate of inflation, and stabilising interest rates, British businesses are still in a precarious position,” she said.