Ammon News - The number of companies declared insolvent in England and Wales last month was 17% higher than a year earlier, as many businesses continued to struggle following a surge in costs last year and ongoing high interest rates.

The Insolvency Service, a government agency, said 2,102 companies were declared insolvent, up from 1,801 in February 2023 and more than 50% higher than in February 2020, when the COVID-19 pandemic began to hit Britain.

Insolvencies fell during the pandemic itself, due to emergency government loan support and restrictions on court action against struggling companies.

"There has been something of a 'death by a thousand cuts' for many businesses," said Jeremy Whiteson, a restructuring and insolvency partner at law firm Fladgate.

Britain's economy entered a shallow recession in the second half of 2023 - although recent data suggests it may be returning to modest growth - and businesses have been under pressure from rising wages, a surge in energy costs and a 16-year high in Bank of England rates.

Scotland and Northern Ireland - which have different insolvency laws to England and Wales - also showed an upward trend in businesses in trouble.

Friday's figures also showed a 23% annual rise in personal insolvencies to an 11-month high of 10,136 in England and Wales. Unlike company insolvencies, personal insolvencies are not significantly higher than pre-pandemic levels.

The Insolvency Service said February's reading was boosted by an unusually high number of individual voluntary arrangements, almost 1,000 of which were approved in 2023 but not registered until February 2024.

Reuters