Company insolvencies in England and Wales jumped by 40% in May to the highest level since monthly records began in 2019.
Government data from the Insolvency Service showed 2,552 companies entered insolvency during the month.
It said the overwhelming majority of these were creditors’ voluntary liquidations (CVLs), where bosses agree to wind up the firm without court action.
The data reported 2,181 CVLs for the month, representing a 38% jump on the same month last year.
Meanwhile, compulsory liquidation increased by 34% for the month to 189, with the Insolvency Service linking this to more requests by HMRC to wind up firms in order to recover cash from them.
There were also 151 administrations in May, which was 80% higher than in May 2022.
Party Pieces, the party decoration and gifts business founded by the Princess of Wales’s parents, was among firms to hire administrators during the month, before it secured a rescue takeover.
Nicky Fisher, president of UK insolvency and restructuring trade body R3, said: “Three years of economic turmoil is taking its toll on businesses.
“The corporate insolvency figures published today are the highest we’ve seen since January 2019 as the fallout from battling the effects of the pandemic, coupled with rising costs, increased creditor pressure and high inflation, is causing more businesses to turn to an insolvency process to help resolve their financial issues.
“Going forward, interest rates and inflation will continue to create challenges for businesses seeking funding over the summer, and could be the tipping point for those businesses who are hanging in there at present.”
