LONDON, April 18 (Reuters) - More companies in England
and Wales entered insolvency during March than at any point
since monthly records started three years ago, according to
official data on Tuesday that showed a 16% increase on a year
ago.
The Insolvency Service Agency reported 2,457 corporate
insolvencies last month, up from 1,784 in February.
The rate of companies falling into insolvency fell sharply
with the onset of the COVID-19 pandemic, thanks to government
support programmes and lockdowns slowing the progress of courts
handling insolvency cases.
But with companies facing rising costs and a stagnant
economy, insolvencies are again on the rise.
The Insolvency Service said creditors' voluntary
liquidations were the biggest driver of corporate insolvency in
March.
"Businesses are struggling to secure financing and pay off
their loans due to high interest rates and the wider impact
inflation and consumer sentiment is having on sales and cash
flows," said David Kelly, head of insolvency at accountants PwC.
"Company insolvencies will likely continue to rise in the
short term, making for a challenging spring," he added.
Individual insolvencies also rose sharply in March, although
were still down slightly on a year ago.
Breathing space applications - which holds off creditor
action for 60 days so people in debt can reorganise their
finances - rose to a new high in March, following their
introduction in May 2021.
"People are still very worried about money and the economy,
and are reluctant to spend on anything other than the basics,"
said Nicky Fisher, vice president at insolvency and
restructuring trade body R3.
Figures on Wednesday are expected to show annual UK consumer
price inflation fell below 10% in March, but still far above the
Bank of England's 2% target.
(Reporting by Suban Abdulla and Andy Bruce; Editing by
Christina Fincher)
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