Monday, January 30

Businesses in England and Wales collapse at fastest pace since 2009 as energy costs bite

Thousands of UK businesses are going out of business at the quickest rate since the height of the global financial crisis, as rising energy costs, dwindling demand, and rising borrowing charges drive them out.

According to the Office for National Statistics, there were 5,629 insolvencies in England and Wales in the second quarter, the highest number since 2009. (ONS). The increase is the most since the third quarter of 2009.

According to the ONS, insolvencies fell in 2020 as the government provided assistance to businesses throughout the epidemic.

However, the frequency of failures has now increased as businesses face new obstacles even after lockdowns have ended.

More here: UK building resumes growth, although optimism is at a 26-month low.

Businesses indicated a dramatic increase in energy expenses as the most significant issue, with issues servicing debt, increased raw material costs, and supply chain interruptions also taking their toll.

While the financial strain has affected all businesses, construction, retail, and lodging and food services had the biggest number of insolvencies in the first half of the year.

Construction companies accounted for 20% of all insolvencies in the first half of 2022, with 2,083 failures. The wholesale and retail industry came in second with 14%.

Meanwhile, 30% of small businesses with 10 to 49 employees stated their top concern was energy.

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