The latest data from the Office for National Statistics (ONS) reveals a significant increase in the number of UK companies going into insolvency during August.
This development has rightly prompted discussions about the resilience of the nation’s economic recovery.
According to a report published in The Guardian on September 15th, 2023, the number of UK companies facing insolvency soared by a fifth in August. This troubling trend has ignited debates among economists, policymakers, and business leaders, who are now closely monitoring the situation and exploring potential contributing factors.
The statistics from the ONS reveal that there were 1,880 CVLs, which is 13% higher than in August 2022, 221 of these were compulsory liquidations, which is 45% higher the same period.
This has shed even more light on the challenges faced by businesses across various sectors. The increase in insolvencies is particularly concerning in the wake of the ongoing efforts to rebound from the economic setbacks brought on by the global pandemic.
The Government’s commentary on the monthly insolvency statistics for August 2023 provides a comprehensive overview of the situation and underscores the need for a thorough analysis of the underlying causes.
The number of registered company insolvencies in August 2023 was 2,308, 19% higher than in the same month in the previous year (1,941 in August 2022). This was higher than levels seen while the Government support measures were in place in response to the coronavirus (COVID-19) pandemic and also higher than pre-pandemic numbers.
Of the 2,308 registered company insolvencies in August 2023:
- There were 1,880 CVLs, which is 13% higher than in August 2022;
- 221 were compulsory liquidations, which is 45% higher than August 2022;
- 11 were CVAs, which is 15% lower than August 2022;
- There were 195 administrations, which is 68% higher than August 2022;
- There was 1 receivership appointment.
The report highlights the potential impact of economic fluctuations, market dynamics, and ongoing supply chain disruptions as potential contributing factors.
Experts and stakeholders are now emphasising the importance of proactive measures to support struggling businesses and foster an environment conducive to economic growth and stability.
The government’s commitment to providing necessary support and guidance to companies facing financial distress is a step in the right direction.
More information on this can be found here.
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