Quarterly corporate insolvencies have hit a 13-year high, according to the R3 trade body for restructuring and insolvency professionals on the Isle of Wight.
Figures for the 2nd quarter of 2022 (April-June) in England and Wales were almost double those for the 1st quarter of the year and their highest since Q3 2009.
R3’s analysis of the latest statistics from The Insolvency Service showed that:
- There were 5,629 seasonally adjusted corporate insolvencies in Q2 2022, an increase of 12.7% compared to Q1 2022’s figure of 4,995 and of 81.3% compared to Q2 2021 (3,105). It was the highest quarterly total since Q3 2009 (5,749).
- There were 28,946 seasonally adjusted individual insolvencies in Q2 2022, a decrease of 10.1% compared to Q1 2022’s figures of 32,197. It was an increase of 6.5% compared to Q2 2021 (27,179).
Garry Lee, chair of R3’s Southern and Thames Valley region, including the Isle of Wight, said:
“The latest quarterly corporate insolvency figures lay bare the major impact inflation and the legacy of the COVID-19 pandemic is having on businesses.
“They show the highest levels of corporate insolvency on a quarterly basis in more than 10 years and a significant increase on the first three months of 2022.
“The steady rise in Compulsory Liquidations we’ve seen since the start of the year also suggests that creditors are now making use of their power to issue winding-up petitions to try and claw back monies they are owed.”
Garry, who is an associate director in the recovery and restructuring services department at professional services group Evelyn Partners’ Southampton office, added:
“The current economic headwinds are only likely to get worse before they get better. Businesses on the Isle of Wight could have a tough 2nd half of the year.
“For company directors and owners concerned about their prospects in the months ahead, now is the time to make sure they have a clear plan in place for the future.
The quarterly fall in personal insolvencies was down to a reduction in bankruptcies, Debt Relief Orders (DROs) and Individual Voluntary Arrangements (IVAs). However, with inflation running at its highest level for many years and recent increases in interest rates, combined with low wage growth, individuals should continue to monitor their finances and seek help, sooner rather than later, where necessary.
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