The number of businesses suffering financial distress leapt 20 per cent in the last year, according to analysis by insolvency firm Begbies Traynor.
More than 274,000 firms across the UK were either behind on their debt repayments in the first quarter, or had experienced a “marked deterioration” in their financial health since the start of 2015.
No section of the economy was immune from the slowdown, as the number of companies identified as being at risk increased in every single industry.
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Financial services was one of the poorest performing sectors, where a total of 4,383 firms were in trouble — 23 per cent more than last year.
Utilities companies fared the worst, as the sharp volatility in commodities prices resulted in a 34 per cent increase in the number of beleaguered businesses.
With the EU referendum on the horizon, Ric Traynor, Executive Chairman at Begbies Traynor, warned things may get worse before they improve.
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“The impending threat of a potential Brexit raises difficult questions over how the UK’s manufacturing sector will cope with changes in regulation … and how the UK’s financial services firms could withstand any loss of passporting rights, foreign investment or influence over EU regulation,” he said.