Company Insolvencies Jump Nearly 20%

UK Economy Finally Leaves the Recession, But Insolvency Blues Persist

So, the last week we’re hearing that the UK has its official exit from recession—GDP ticked up 0.6% in Q1. That’s the kind of headline that feels like finding a sock that matches your other sock after an entire winter’s laundry.

Why the Numbers are Still a Bit Drippy

Liquidations: Almost 300 written off last month.
Administrations: Up to 144, climbing like a bad temp in a drafty room.
Insolvent Voluntarities: Double the 18 from before—so, 36. It’s a 30‑year high that’s been re‑introducing itself thanks to interest rates that hit 8‑figure numbers.

Hard‑Hit Sectors: Retail and Hospitality

Retail isn’t exactly feeling the “shop till you drop” vibe. Companies like Wilko, the Body Shop’s UK stores, and Ted Baker all went belly‑down in a “store‑apocalypse” fashion. Hospitality? Think restaurants that had to take a cooking lesson straight from the “do re mi fa…”.

Why This Happened

Three big culprits: higher interest rates city‑wide, soaring energy bills that made every electricity meter read like a bar chart, and a wage inflation that’s (well) overheating the economy. Even though energy costs have eased, consumers still feel the pinch—likes the financial version of a burnt popcorn at a movie.

Executive Take‑away from FRP’s David Hudson

“The GDP numbers are the signal that we’re finally getting out of our post‑Covid hangover. It’s like a sigh of relief after a long, tedious night shift.”
But Hudson reminds us that optimism is only a hint—more business flops loom ahead as the heavy cost legacy that high rates, wage hikes and supply chain snags still haunt the marketplace.

“Even as the monthly ebb and flow pares down, we see a growing trend of larger employers emptying the borrowing pool, which could ripple through supply chains and job markets.”

If you’re hoping the tide will stay high—well, you’ll need to keep an eye on the market waves because the next months might look like a financial roller coaster.