South East insolvencies likely to remain high this year, says R3
Corporate insolvencies were up almost 14 per cent in 2023 – a trend which is likely to continue through the coming months unless the economic picture improves, according to trade body R3.
New data from the government’s Insolvency Service has shown 25,158 seasonally adjusted corporate insolvencies last year.
Promisingly though, personal insolvencies for 2023 were down 12.9 per cent on 2022 figures at 103,454, and even lower than pre-pandemic levels in 2019.
Neil Stewart, chair of R3’s Southern and Thames Valley, remains ‘cautiously optimistic’ that the landscape will improve.
“The last year has seen a rising tide of corporate insolvencies”, he said.
“A combination of increased costs, cautious spending, creditor pressure and the post-pandemic hangover have seen more businesses enter a corporate insolvency process to help address their financial issues than in 2022.
“If the overall economic picture improves, costs stabilise, and spending picks up as consumer and business confidence increase, then the tide should start to turn.
“The upsurge in consumer spending that many businesses had been hoping for since the end of lockdown didn’t happen, or at least wasn’t sustained, and many businesses hoping for that time to come simply ran out of time and money.
“Rising bills, food and fuel prices were a major concern and a major expense in 2023, while high inflation forced up interest rates and left a lot of people worrying about the cost of mortgages and loans.
“The good news is that inflation has continued to fall faster than expected. The price of food, energy and fuel are still a worry for many, but there’s light at the end of the tunnel – depending, of course, on events in the increasingly volatile wider world.”