Monthly insolvencies in England and Wales hit three-year high

theguardian.com:

More companies in England and Wales went bankrupt in March than at any point since monthly records began three years ago.

With businesses struggling with rising bills, higher interest rates and a stagnant economy, the Insolvency Service said the number of corporate insolvencies jumped to 2,457 last month, up 16% on a year earlier and up from 1,784 in February.

The rise also represented a 55% leap compared with pre-pandemic levels in March 2019, when 1,581 companies went bust.

Insolvency experts said the rate of company collapses was likely to keep rising during the year as more businesses throw in the towel amid stubbornly high inflation and rising interest rates.

In Cardiff, Louise O’Leary, who owns and runs the Frolics Cafe on the city’s outskirts, said the escalating costs of food, energy and staff wages to compensate for inflation had forced her to rely on credit cards to pay bills. “Those higher costs have cleared out any profit I used to make and meant I need loans to survive,” she said.

O’Leary employs one full-time and seven part-time staff and is increasing prices to close the gap between her outgoings and income. “But we need to do that slowly because so many of our customers are on low incomes,” she said, adding that she was especially angry that the government had ended its business energy support scheme.

“I cannot understand why during the pandemic small businesses were looked after and now we are being thrown to the dogs. How can you be so highly regarded one minute and not regarded at all the next,” she said.

Government support programmes during the Covid-19 pandemic are credited with preventing a wave of companies falling into insolvency. But recent cuts are expected to mean insolvency rates rise again.

David