Begbies Traynor’s ‘Red Flag Alert’, which monitors the financial health of British companies, claimed that between April and June this year, 1,094 city companies were struggling to make ends meet.
This was a one per cent increase in the number for firms in difficulty from the previous first quarter of the year – although it represented an eight per cent year-on-year decrease on the same period in 2021.
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However, when looking at the sector picture, there is evidence that some of the region’s industries are continuing to struggle, with construction and professional services experiencing the biggest quarterly increases, seeing 14 and four percent rises respectively between the first and second quarters of 2022.
The news comes amid the nation’s deepening cost of living crisis – with the Bank of England warning the UK economy will be plunged into a recession for more than a year this autumn as rising energy prices push inflation above 13 per cent.
Commenting on the trade figures figures, Julie Palmer, partner at Begbies Traynor in Portsmouth, said: ‘Having emerged from the pandemic, companies in Portsmouth were hoping for an economic boom but that has simply fizzled out, as a combination of economic issues have taken their toll, reducing both business and consumer confidence.
‘Indeed, rising insolvency rates, combined with our own anecdotal evidence from speaking to the directors of distressed companies, highlight the impact of rising costs on businesses.
‘Many are fighting on, but the environment is only going to get worse, not better, at least until next year. I fear that it will be a troublesome autumn as businesses which have struggled for so long are finally overwhelmed.
‘That is why it is so important that any businesses facing financial difficulties, for whatever reason, should seek professional advice in order to fully understand the options available.’
Nationally, the latest Red Flag Alert research for between April and June recorded 582,452 businesses in significant distress with companies continuing to be impacted by rising inflation, higher labour, material and energy prices, and faltering consumer and business confidence.