Business & Investment

More than 1,400 companies went bankrupt in England and Wales last month

The number of bankrupt companies in the UK and Wales soared to the highest level last month since the outbreak of the pandemic. Experts predicted that the end of government support for debt companies would lead to a surge in bankruptcy next year.

Some of the latest suppliers in the energy industry are among the 1,446 companies that went bankrupt in September, up 7.2% from the previous month.

Utility Points, People’s Energy, PfP Energy, and Money Plus Energy closed trading later this month, after which a series of energy companies went bankrupt at record energy market prices.

EVCL Chill, a chilled food delivery business based in Alfreton, Derbyshire, has collapsed into power, partly due to a shortage of HGV drivers.

Bankruptcy services said the September increase meant that the number of bankruptcies increased by 56% compared to the September 2020 figure of 928.

Most of the government’s measures to protect businesses from creditors were lifted in September, raising concerns that many businesses that had to borrow heavily to survive during the pandemic will collapse next year.

According to a recent Bank of England report, one-third of UK SMEs are classified as very debt-rich with a debt level of more than 10 times their cash balance, compared to 14% before Covid-19. I did.

Euler Hermes, a major trade credit insurer, said it expects a total of 17,100 potential bankruptcies this year to exceed 20,000 in the UK next year, an increase of 32%. This is compared to the projected increase of 68% in Italy, 23% in France and 4% in Germany.

Maxim Remerle, head of bankruptcy investigations at the company, said: These include the momentum of global economic recovery, the pace of withdrawal of state support, and many vulnerable companies that are still at high risk of default, especially the pre-Covid-19 “zombies” that have emerged from emergency measures. .. By extra debt from the crisis. “

Claire Burden, a partner in Smith & Williamson’s consulting team, said the energy crisis and rising transportation costs could echo in other sectors, causing manufacturing companies to call receivers in March 2022. Causes another spike.

Nicky Fisher, vice president of bankruptcy trade association R3, said the economic situation is becoming more difficult for many industries.

“Consumers are now becoming more and more cautious about economic conditions, personal finances, and rising living costs, and more cautious about spending money.

“And with the widespread disruption of the supply chain from September to October and the sharp rise in wholesale energy prices, there may be little room for corporate and personal systems that have not yet recovered under the influence of Covid. there is.”

Individual bankruptcies increased 9% in September to 9,954 compared to 9,118 in August, 33% higher than 7,471 in September 2020.

Fisher said the situation was still “a tough situation for people,” he added. “In September, vacancies increased and returned to pre-pandemic levels. By the end of the program, more than a million people were still slaughtered.”



More than 1,400 companies went bankrupt in England and Wales last month

https://bmmagazine.co.uk/in-business/more-than-1400-firms-went-bust-last-month-in-england-and-wales/ More than 1,400 companies went bankrupt in England and Wales last month

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