Record number of firms on the brink

A RECORD number of businesses fell into serious trouble during the first quarter of the year, under pandemic pressure.

In the third lockdown, 93,000 firms’ finances weakened to the point of ‘significant financial distress’, according to the ‘red flag alert’ report by insolvency experts Begbies Traynor – the largest quarterly rise since 2014, and means 723,000 companies are at risk of going bust. Since the pandemic began, the number of severely distressed firms has rocketed by 42pc.

Julie Palmer, at Begbies Traynor, said: ‘The dam of zombie businesses could be about to break. This is no ordinary recession and while businesses have had significant assistance from central government, large parts of the economy have been put on hold.’

The hardest-hit sectors have been transport and logistics, property services, financial services and construction.