Despite ongoing challenges to the UK economy, in October Yorkshire and the Humber put in the strongest performance of all of the regions and nations, seeing a double-digit fall in insolvency-related activity since the previous month.
The latest research from insolvency and restructuring trade body R3, which is based on an analysis of data provided by CreditSafe, shows that in Yorkshire and the Humber insolvency-related activity (which includes liquidator and administrator appointments and creditors’ meetings) fell by 18.9% last month. The number of businesses affected in the region dropped from 291 in September to 236, the lowest number since May.
In October, six other regions and nations also saw a drop in insolvency-related activity since September with Northern Ireland falling by 10%, Wales by 6.5% and the South East by 3.7%. In contrast, the North East experienced a month-on-month rise of 26.8%, followed by Scotland with an uplift of 10.2% and the North West with an increase of 8%.
Looking at the number of start-ups, another key indicator of economic health, Yorkshire and the Humber again performed well with an increase of 14.3% since September, with only Greater London seeing a greater rise in levels of new businesses (up by 15.1%). The poorest performances were from Wales (-0.4%), and from Scotland and the West Midlands (both up by around 6%).
Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds, said: “Despite gloomy forecasts for the UK economy, this month’s research does appear to show a glimmer of light at the end of the tunnel. Although growth is expected to be slow into 2024, interest rates appear to be reaching their potential peak and businesses are fighting hard against the current challenges.
“It is encouraging to not only see Yorkshire and the Humber having the greatest month-on-month fall in insolvency-related activity in October, but also that a total of seven of the 12 regions and nations surveyed also experienced a drop in these type of financial problems. The increase in levels of entrepreneurs starting new businesses both here and across the UK is also a positive sign.
“However, higher interest rates and inflation are likely to continue to impact both corporate investment and consumer spending, and the forthcoming election will also add to business uncertainty. In the midst of such a fragile economic outlook, directors would be well advised to remain cautious and seek professional advice at the first sign of financial difficulties.”