By Harry Mottram: On BBC Radio 4’s Today programme on Monday 26th June, 2023, Matt Ingram Managing Director, UK Restructuring Advisory at Kroll said that pre-pandemic there were typically circa 1,500 insolvencies a month, but in May this year there were around 2,500.

Speaking to Sean Farrington he said: “We’ve had that catch up of businesses that didn’t go bust in the pandemic, but we are beyond that now and we are beginning to see the effects of the interest rate rises on firms going into formal insolvency. What we typically see with our clients is a constraint on working capital. A lack of cash.

“I was up early this morning speaking to Sean Farrington on BBC Radio 4 on how the Base Rate rise will impact businesses. The latest insolvency numbers show a 40% increase in company failures year-on-year. At Kroll, we are seeing increases in administrations in all sectors of the economy, especially in food and drink. Given the economic headwinds, it’s likely we’ll see more growing administrations and Creditor Voluntary Liquidations (CVLs) across the board.”

Added to those interest rate rises there were the macro-economic factors he said of inflation, foreign workers leaving for Europe due to Brexit, labour shortages, energy and fuel costs and all having an impact he said along with servicing historic debt. Typically, he said the main insolvencies are CVLs which close down a business as they have little in the way of meaningful assets.

The main industry sectors being hit by the cost of servicing debt he explained were food and drink sectors, with a ‘stand out’ increase year on year of 140% of companies going into administration, while the construction industry is seeing a 30% hike in insolvencies and printing and manufacturing in general an eye watering 20% rise in company failures.

Ian Carrotte of ICSM said that Ingram’s observations chimed with the experiences of ICSM’s with an alarming increase in insolvencies in the last year with signs that company failures will continue at an unacceptable level. He said: “Before Covid there had been a rise in insolvencies but not on this scale. The cost of borrowing has hit hard as during the lockdowns many firms could get the various grants and covid loans at good rates – now that has changed with the Chancellor and the Bank of England using interest rates to curb inflation. Our advice is always to minimise debt, down size and cut costs and keep a tight grip on credit control.”


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