(Bloomberg) --
The number of companies filing for insolvency in the UK last quarter was the highest since 2009, a situation that's expected to get worse before it gets better.
The period saw 5,629 company insolvencies registered in the UK, an 81% increase on the same period a year earlier, according to data released on Tuesday by the UK's Insolvency Service. It's the largest number of companies to go out of business for nearly 13 years.
The majority of the company insolvencies were creditors' voluntary liquidations, or CVLs, accounting for around 87% of all cases. That's when the directors of a company take it on themselves to wind-up an insolvent company.
“The record levels of CVLs are the first tranche of insolvencies we expected to see involving companies that have struggled to stay viable without the lifeline of government support provided over the pandemic,” Samantha Keen, a partner at EY-Parthenon, said by email. “We expect further insolvencies in the year ahead among larger businesses who are struggling to adapt to challenging trading conditions, tighter capital, and increased market volatility.”
Life is getting harder for a number of UK businesses, with inflation and soaring energy costs making for a difficult trading environment. The Bank of England is likely to raise rates by the most in 27 years later this week, increasing finance costs for many firms. On top of that, measures to help companies survive the pandemic, including relief from landlords looking to collect unpaid rent, ran out in April.
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