Almost 50,000 companies are being pushed towards bankruptcy as interest rates remain high, costs increase and consumer demand falls.

The number of companies on the brink of insolvency has risen by 25.9% in the last quarter as 47,477 remain in critical condition.

The construction sector is the in the most critical financial distress with 7,849 companies risking bankruptcy, according to Begbies Traynor.

Rates of insolvency risk in the health and education sector jumped the furthest, by 41.3% to 2,719.

“After a difficult year for British businesses that was characterised by high interest rates, rampant inflation, weak consumer confidence and rising and unpredictable input costs, we are now seeing this perfect storm impacting every corner of the economy," said Julie Palmer, partner at Begbies Traynor.

She added: “Now that the era of cheap money is firmly a thing of the past, hundreds of thousands of businesses in the UK who loaded up on affordable debt during those halcyon days are now coming to terms with the added burden this will have on their finances.”

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