Companies braced for insolvencies surge after Covid

BRITISH businesses are braced for “a wave of insolvencies” as inflation drives up costs in the aftermath of the pandemic.

The number of companies in critical financial distress jumped one fifth on the year to 1,891 in the first quarter of 2022, according to corporate recovery group Begbies Traynor.

The numbers cover businesses with county court judgements (CCJS) of more than £5,000 filed against them.

Construction businesses are particularly vulnerable, as are those in the hospitality industry.

Julie Palmer, partner at Begbies Traynor, said the end of Covid support measures such as the block on winding-up petitions has led to a rush of insolvencies.

“The critical distress and CCJS data are likely predictors of a wave of insolvencies coming,” she said.

A total of 4,896 company insolvencies were registered in England and Wales in the first quarter of the year, according to the Insolvency Service.

This is more than double the 2,309 in the same period of 2021.