After an almost relentless stream of bad news for British businesses, the Insolvency Service has finally reported a decline in the number of business bankruptcies.
In March 2024, 1,815 companies filed for bankruptcy. This is not only a 17% decrease from the previous month’s statistics, but also a 17% decrease from the numbers reported in March 2023. This news comes as a welcome surprise for the UK, after for a long time the number of bankruptcies has been rising every month. business.
Monthly figures have also consistently exceeded the same period last year. That March 2024 was able to successfully buck both trends is expected to be a sign of much-needed stability. The rise in numbers meant that 2023 and early 2024 recorded insolvency levels not seen since the global financial crisis of 2008-2009.
Similar pattern?
However, before opening that bottle of champagne, it’s important to take a look back at how the previous year unfolded. In March 2023 he saw a sharp increase in bankruptcies of 2,457 companies, but in April of the following year only he saw a significant decrease to 1,685 companies.
On the other hand, the number of bankruptcies in March 2022 also increased from the previous month, reaching 2,120. This was followed by a decline in April as well, to 1,988. Both years saw a return to higher numbers rather than a downward trend.
Maybe we’re experiencing the same spring slump as usual, just a month early. In any case, the relative easing of the sharp rise in the bankruptcy rate will be welcomed.
“A glimmer of hope”
Ben Westby, senior client manager at Forbes Burton, has a hopeful outlook on the reported numbers. He suggested that “the decline in March is a positive sign for the coming months.” If you look at the same month for the past two years, big numbers have been filed. The timing may suggest that company owners may have been waiting until the end of the financial year and trying to wrap things up just before then.
“Of course we won’t know until we see the numbers over the next few months whether we’ve finally turned the corner, but it certainly gives British businesses a glimmer of hope.”
Despite this good news, the numbers undoubtedly remain high. Insolvencies in the UK hit an all-time low due to the pandemic, but began to rise rapidly in 2021 and 2022. By the end of 2023, the number of UK business bankruptcies will be the highest since 1993. Therefore, the decline may take time. It will take time for you to settle down to a more comfortable level than you are currently at.
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