The number of businesses declaring bankruptcy in England and Wales jumped 43% in August, according to government data, fueling concerns about the health of the UK economy.
According to the Insolvency Service, there were 1,933 bankruptcies in August, compared with 1,348 in the same month last year. This was 42% above his August 2019 level before the Covid-19 pandemic hit.
Economists worry businesses will struggle more and more as consumers cut spending amid high inflation. The government has embarked on an energy price freeze to cushion the blow of rising gas and electricity costs, but the unit price that households will pay this winter is still well over double his recent levels. .
At the same time, businesses are facing similar energy price pressures and other cost increases. The government has promised him six months of “equivalent support”, but the prime minister’s office has acknowledged that details of the package may not be available for several weeks.
Business groups complain that delays in support will likely push many companies into bankruptcy as they deal with the inevitable skyrocketing bills.
Prime Minister Liz Truss and Prime Minister Kwasi Kwarten are due to unveil details of a package to prevent the UK economy from contracting in a mini-budget on Friday 23 September. warns that a recession may be inevitable. The Bank of England is predicting a prolonged recession, although it has not taken into account the new government’s policies.
Callum Pickering, senior economist at investment bank Berenberg, said: It cannot be completely prevented. ”
Retail sales fell more than expected in August, adding to worries about the UK economy. The pound hit her 37-year low against the US dollar after the data, reflecting traders’ concerns about the economy.
Some UK businesses have been shielded from much of the economic turmoil of the past two-and-a-half years by unprecedented government pandemic support. This included a furlough scheme to pay wages for those unable to work during the lockdown, as well as a series of loan schemes.
However, business insolvencies in England and Wales have increased significantly since February 2021, when they hit a pandemic low of less than 750 per month.
Data collected separately in Scotland and Northern Ireland show rising levels of business insolvencies compared to recent months.