Insolvencies in England and Wales soared further in the second quarter of the year, reaching the highest level since 2009.
In total, 6,342 companies were declared insolvent. That was up 9% from Q1, which was also much higher than normal.
Most insolvencies were creditors’ voluntary liquidations, but the biggest jump was in compulsory liquidations.
The figures look slightly less bad when the increase in the number of companies formed since 2009 is accounted for. But even then, the portion of companies declared insolvent was the highest since 2014, representing more than one in every 200 businesses.
David Kelly, head of insolvency at PwC, said: “Today’s data shows the UK has had the highest quarterly number (6,342) of company insolvencies since the financial crisis in 2009. In total, in the first half of 2023, there have been approximately 13,000 corporate failures.
“High inflation and the increasing cost base for firms is resulting in the erosion of both liquidity and shareholder value, thus reducing confidence in the ability to hit future forecasts. Coupled with rising interest rates, it is making for a very challenging environment for business.
“Like homeowners coming off fixed mortgage rates, many businesses have yet to refinance their debt, meaning the full impact of higher interest rates may yet to be felt.
Kelly added that more trouble could be on the way for big companies, which were starting to go bust after being more resilient in the initial wave of collapses.
“An increasing number of larger companies - who have so far been more resilient to the economic pressures - may go into insolvency this year because they tend to have bigger loans and higher levels of debt to pay off. Indeed, in the first half of this year 157 businesses entering insolvency had a reported revenue of over £10m,” he said. “These firms are an important part of the UK corporate ecosystem - they employ more than 33,000 staff and collectively generated over £6bn in revenue.”
Among the notable companies to be declared insolvent in the second quarter of the year were Paperchase, Hunter Boot and Dirty Martini.
