Global insolvency rates are rising for the first time since the aftermath of the 2008 financial crash with the UK expected to be the worst hit, according to a multinational insurance company.
An insolvency outlook report by Atradius forecasts business failure rates will increase by 10 per cent this year in Britain and by 2.7 per cent across western Europe.
Insolvency rates are expected to reach 2.8 per cent across developed markets, according to the report.
The firm predicted a 5 per cent increase in the UK’s rate of insolvency for 2020 on the assumption the government will ask the European Union for a Brexit extension before October 31.
Stuart Ramsden, Head of Commercial for Atradius UK, said: “The strain from a global economic slowdown, political uncertainty and trade tensions is evident, taking a toll on growth and contributing to the first global rise in insolvencies in a decade.
“However, businesses cannot be inhibited by this and if they want to achieve growth and must be prepared to face the challenges by protecting their business from any potential negative impact.
“A robust trade strategy is crucial with risks assessed and mitigated against in real time.”
The International Monetary Fund (IMF) cut its global growth forecast for 2019 from 3.3 per cent to 3.2 per cent in July.
It cited the US-China trade war and increasing geopolitical tensions in the gulf as reasons for the downward revision.
Meanwhile, the Bank of England cut its 2019 growth forecast for the UK economy from 1.5 per cent to 1.3 per cent in August.
Its growth forecast for 2020 is 1.3 per cent.