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Insolvencies increased again in June as businesses continued to continue to grapple soaring interest rates and stubborn inflation.
Data from the Insolvency Service revealed that there were 2,163 insolvencies in June, which is a 27 per cent rise on the same period last year and above pre-pandemic levels.
The majority of insolvencies listed were creditors’ voluntary liquidations, which rose 21 per cent year on year to 1,759. There was also a 77 per cent rise in compulsory liquidations year on year, bringing the monthly total to 260.
The news comes as Prime Minister Rishi Sunak has launched a new Business Council to fuel economic growth and make the UK a leading hub to do business.
Commenting on the findings, Josh Boer, director at tech consultancy VeUP said: “In an increasingly challenging landscape, far too many businesses are still struggling to secure funding and adapt to the pace of technology change. With AI disrupting the marketplace and reshaping traditional job roles, it’s absolutely critical that the next generation of business owners are equipped with the financial firepower and IT capabilities they need to operate and thrive in a fast-moving world.”
Steven Mooney, CEO of FundMyPitch said: “With funding drying up and banks failing to get behind the next generation of entrepreneurs, is it any wonder that insolvencies are on the rise? The real scandal is that so many innovators with bright ideas and amazing products struggle to get financial backing or even a credible valuation in the UK in the good times or bad.
“A long-term failure to invest in up-and-coming businesses and high growth scale ups will not only damage our economy, it will leave us severely underdeveloped in key areas like cyber and AI, which is a dangerous place to be,” added Mooney.