There was a sharp rise in insolvency-related activity nationally, including in Yorkshire and the Humber, in February, according to the latest research from the UK’s insolvency and restructuring trade body, R3.
The findings, which are based on an analysis of data provided by Creditsafe, shows a 39% increase in insolvency-related activity in the region, with new business start ups increasing by just 0.2% in the same month.
Insolvency-related activity, which includes liquidator and administrator appointments and creditors’ meetings, was up across every region of the UK apart from Northern Ireland, which saw a 38% drop. The East Midlands and South West experienced the biggest increases, up 79% and 77% respectively on January’s figures.
Business start up numbers also fell across every English region apart from Yorkshire and the Humber (up 0.2%). Scotland, Northern Ireland and Wales also saw small increases in new businesses, with Scotland the highest at 9%.
Dave Broadbent, chair of R3 in Yorkshire and partner at Begbies Traynor in York and Teesside, said: “With SMEs as ever bearing the brunt, UK business is contending with a multitude of challenges that are threatening stability and growth right now, and so unfortunately both the hike in insolvency-related activity and the disappointing growth in new startups come as little surprise.
“We are now witnessing a worrying decline in borrowing as businesses see their peers struggling to manage debt, while concerns are still rife among employers about the Employment Rights Bill and the knock-on costs and complexities that might ensue. In some cases this is putting the brakes on firms investing and creating new jobs.
“The threat, and reality, of trade barriers also continues to loom large, for exporters and supply chains, and of course this is all compounded by the extremely cautious consumer spending that has dampened business activity across multiple sectors and paints a gloomy outlook for coming months.”
He added: “That said, SMEs are well known for their resilience and optimism in the face of adversity and it is always vital to bear in mind the invaluable role professional advice can play in helping businesses to adapt and change course rather than becoming a victim of economic headwinds.”
