The most recent insolvency statistics for England and Wales have been released, revealing the significant economic difficulties confronting businesses in the South East. According to R3, a trade association for the insolvency and restructuring industry, insolvencies have increased by a staggering 79 per cent compared to pre-pandemic levels at the end of 2019.
In December 2023, a total of 25,155 insolvencies were recorded across both nations, a notable increase from 22,129 in 2022. While corporate insolvencies saw a seasonal decline of 18.9 per cent from the previous month, and personal insolvencies also dropped by 20.3 per cent between November and December 2023, the figures remain significantly higher than pre-Covid-19 levels.
Neil Stewart, chair of R3’s Southern and Thames Valley region, expressed his apprehension about the situation, noting that corporate insolvencies in December were at their highest in four years. He attributed this surge to the culmination of a challenging year for businesses, especially in the South and Thames Valley regions. Stewart highlighted the difficulties faced by firms in these areas, including increased costs, narrow profit margins, reduced consumer spending, and higher energy prices, all of which have added to the financial strain on many businesses.
Stewart stressed the importance of the New Year as a critical period for businesses, and highlighted the seasonal decrease in insolvency-related activities during this time. He also cautioned that if the trading period after the festive season does not show improvement from the pre-Christmas period, insolvency numbers may continue to rise as businesses that were counting on a seasonal income boost to cover their financial shortfalls turn to the insolvency and restructuring profession for assistance.
In response to these developments, Stewart urged individuals and businesses in the South and Thames Valley regions who are grappling with financial concerns to seek advice from qualified and regulated professionals at the earliest signs of trouble.
The increase in December insolvencies serves as a striking reminder of the persistent economic pressures faced by businesses in the South East. As we navigate these challenging times, it is crucial for businesses and individuals to remain vigilant about their financial health and seek the necessary support to endure the challenges ahead.
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