Company administrations reach highest levels since 2014
Latest Government statistics show the highest underlying level of company insolvencies in any quarter since Q1 2014, and personal insolvencies at their highest quarterly levels since 2010. This suggests that there has been a further deterioration in the on-going difficult economic environment for both businesses and consumers.
It seems the on-going lack of certainty over Brexit continues to cause significant problems for businesses, delaying investment decisions, and in some cases increasing costs and reducing cash-flow as a result of stockpiling and storage. Rising overheads from sterling fluctuations, increased employment costs and the continued challenges with business rates are also having a negative effect in many sectors. This is further exacerbated by the insolvency of one company having a knock-on effect on others in its supply chain, which has been particularly apparent in the construction sector.
The elevated level of personal insolvencies, made worse by the increasingly difficult credit situation, seems also to be having a detrimental and domino effect on businesses as consumer confidence and demand weakens and spending is cut back.