UK Insolvencies set to peak in 2024

While a recovery is expected in 2025, UK businesses must first navigate a year of economic uncertainty with insolvency rates peaking at a 15-year record.

There are still a number of significant challenges facing UK companies, despite the fall in inflation and the beginning of global economic recovery.

One challenge is the ongoing geopolitical uncertainty, especially, with the wars in Ukraine and the Middle East. Furthermore, countries accounting for 60% global GDP are heading to the polls in 2024, including the UK.

Meanwhile, the increased cost of borrowing and limited availability of financing is putting a further strain on the most exposed sectors. Cuts to interest rates are expected later this year but will remain at relatively high levels.

Firms will also have to juggle reduced global demand with elevated operating costs, energy prices, continuing wage growth and ongoing supply-chain pressures.

Data shows that in 2024:

• Around 31,000 UK business are expected to fail, a 10% increase on last year.
• Insolvency levels will end the year 43% above pre-pandemic levels.

The expected rise would mark the fourth consecutive year of increased business insolvencies for the UK.

Given the current levels of insolvency, it is essential to have protection in place for your business. Learn more about how Credit Insurance can protect your business in the event of one of your debtors entering insolvency by contacting Clearview Credit today.

You can read the full article from Allianz Trade here.