‘The sad fact is that businesses are being hit from a variety of angles’ – corporate insolvencies up by 33.6% in August

That’s the grim verdict delivered by R3, the UK’s insolvency and restructuring trade body.

The main drivers of this increase are long-term economic issues, director fatigue and creditor pressure.

R3 regional chair Garry Lee is warning that some businesses in Hampshire are at a point where they need specialist help to survive.

Personal insolvencies levels also increased in August compared to July, but were down when compared to last year and pre-pandemic levels.

There were 2,308 corporate insolvencies last month compared to July's total of 1,728.

It was a 71.3% increase on August 2021's total of 1,347 and 69.1% compared to pre-pandemic levels in August 2019 (1,365).

Lee said: ‘August’s corporate insolvency figures were their highest for this month in four years as a mixture of long-term economic issues, director fatigue and creditor pressure saw more companies enter an insolvency process.

‘Creditors’ Voluntary Liquidations remain high as more and more directors choose to wind down their firms, while compulsory liquidation numbers were at their highest this August for four years as creditors continue to pursue the money they are owed.

‘August’s administrations figures were the highest monthly figure we’ve seen since January 2019, which is a sign that more and more businesses are at a point where they need specialist help.

‘The sad fact is that businesses are being hit from a variety of angles – and all these blows have an effect on their bottom line.

"Cost inflation has been a problem for some time and interest rates remain at a 15-year high, meaning that the cost of servicing debt has increased.

‘As a result of this, upward pressure on pay is continuing, while recruitment is a challenge, and people are still cautious about spending money on anything other than the essentials.

‘It’s unlikely the picture will improve in the near future as people and businesses face the prospect of increased energy bills, and people start watching their spending even more closely.”