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LONDON: Bankruptcies of companies in England and Wales rose 19% year-on-year in August to the third highest level since the monthly record high started in January 2019, as businesses struggle with rising costs and an uncertain economic outlook, government data showed on Friday.
The Insolvency servicea government agency, reported 2,308 business bankruptcies last month, up from 1,728 in July.
Companies were usually declared bankrupt through creditors’ voluntary liquidations, where a company’s directors agreed to dissolve the company without a formal court order.
The number of companies going bankrupt fell sharply at the start of the Covid-19 pandemic, thanks to government support programs and lockdowns that slowed the progress of the courts hearing insolvency cases.
The figures also showed that forced liquidations increased by 45%, partly due to more requests from authorities to claw back money from companies unable to pay their tax bills.
Corporate borrowing costs have soared as the Bank of England, which is expected to raise interest rates for the 15th consecutive time since December 2021, battles to curb persistent inflation.
Private bankruptcies fell by 11% year-on-year in August, which the Insolvency Service said was due to a decline in the number of individual voluntary schemes.
Requests for breathing space – which delay creditors’ action for 60 days so that people in debt can reorganize their finances – rose 19% from a year ago.
The Insolvency servicea government agency, reported 2,308 business bankruptcies last month, up from 1,728 in July.
Companies were usually declared bankrupt through creditors’ voluntary liquidations, where a company’s directors agreed to dissolve the company without a formal court order.
The number of companies going bankrupt fell sharply at the start of the Covid-19 pandemic, thanks to government support programs and lockdowns that slowed the progress of the courts hearing insolvency cases.
The figures also showed that forced liquidations increased by 45%, partly due to more requests from authorities to claw back money from companies unable to pay their tax bills.
Corporate borrowing costs have soared as the Bank of England, which is expected to raise interest rates for the 15th consecutive time since December 2021, battles to curb persistent inflation.
Private bankruptcies fell by 11% year-on-year in August, which the Insolvency Service said was due to a decline in the number of individual voluntary schemes.
Requests for breathing space – which delay creditors’ action for 60 days so that people in debt can reorganize their finances – rose 19% from a year ago.
