The Government’s Insolvency Service have published new figures that show a big increase in the number of companies going bust in recent months.
In the third quarter of the year ending September 2017, there were 4,152 company insolvencies in England and Wales. There was an increase of 15% in the underlying rate of insolvencies compared to the previous quarter and a rise of 14.5% in comparison to the same three-month period last year.
The increase in the number of companies becoming insolvent was largely down to by a big rise in the number of companies going into Creditors Voluntary Liquidations (CVL). This is the procedure used by company directors to close their company voluntarily, where the company is insolvent and unable to continue to trade. The number of voluntary liquidations increased by 22.2% compared to the previous three months and went up by 21.2% in relation to the same period in 2016.
Bucking the trend
The increase in the number of companies going bust has largely bucked the trend of the last few years, where the underlying rate of company insolvencies had been on a downward trajectory.
We will have to wait and see if the trend towards more companies going bust continues in the coming months. Our ‘gut feeling’ is that it will, as businesses begin to feel the pinch of higher inflation, higher costs and general a lack of business confidence and uncertainty about the future, taking into account ‘known unknowns’ such as Brexit, rising interest rates and currency fluctuations.
Are you concerned about the future for your business? Give us a call today to discuss your company’s options. You may be pleasantly surprised to find that the future isn’t as bleak as you might imagine. Call Paul Moorhead today on 01709 331300. We can help.