According to UK government figures, the year 2023 will see the largest number of company bankruptcies since 2009. These figures also show a 25% increase to nearly 40,000 companies nearing financial collapse in the past three months.
What’s driving the notable upswing in insolvencies?
Figures from before the pandemic show a constant variation in insolvencies, with a dramatic drop during the lockdown period. The implementation of COVID-19 support measures, such as the furlough scheme, bounce-back loans, and HMRC’s forbearance, effectively curtailed the rate of business failures. However, with the end of these supports and the increase in interest rates, we are now observing a surplus of companies declaring bankruptcy.