Under the pressure of rising borrowing costs and a weak economy, the number of bankrupt companies in the UK increased by 14% in 2023.
The Zhitong Finance App learned that under the pressure of rising borrowing costs and economic weakness, the number of bankrupt companies in the UK increased by 14% in 2023. According to data from the UK Bankruptcy Service, the number of bankrupt companies reached 25,159 in 2023, and retail, construction and hotel companies became the “hardest hit area”. The number of bankrupt companies increased 2% year over year in December of last year, while December was generally the month when the number of bankrupt companies was low.
These data show that companies are facing increasing pressure in the post-pandemic era. The number of companies that went bankrupt last year increased by almost 50% compared to 2019.
The number of bankrupt companies in the UK surged 47% last year from pre-pandemic levels
“2023 is a particularly challenging year,” said Sarah Rayment, co-head of Kroll's restructuring business. “Over the past 18 months, due to the combined effects of rising inflation, energy bills, and interest rates, we have unfortunately seen many companies go out of business, especially so-called zombie businesses.”
According to PricewaterhouseCoopers research, about 98% of the 3,000 new bankrupt companies added in 2023 came from small companies with an annual turnover of less than £1 million.
Construction, hospitality, and retail were the industries with the largest number of bankrupt companies in November.
However, pressure on corporate balance sheets may begin to ease this year, and the market expects the Bank of England to cut interest rates after a sharp drop in inflation.
David Kelly, head of bankruptcy at PricewaterhouseCoopers, said: “Businesses are looking forward to relief in the first half of this year, but now they may be delayed.” Markets are still worried about long-term high interest rates, the Red Sea crisis, and its knock-on effects on inflation.