The number of UK Insolvencies has grown by around 20 per cent since record lows in 2015, according to the latest Government data.
The Insolvency Service figures show that insolvency procedures in the UK rose by the end of 2018, to sit at 17,439.
In comparison, insolvencies in the UK fell by 39 per cent between 2009 and 2015, despite a small rebound in 2011.
The number of insolvencies continued to decline into the first three months of 2016, before sharply rising from 3,591 in Q3 2016 to a high of 5,541 in Q4 2016.
Since then the number of insolvencies has continued to steadily increase with monthly figures failing to fall below 3,500 insolvencies per quarter, while 2018 consistently saw around 4,000 insolvencies every three months – far higher than in the period running up to the record lows experienced in 2015.
Several factors are thought to be behind this recent increase in insolvencies, including the growing uncertainty surrounding Brexit and changes in consumer attitudes.
In fact, the Government’s own report highlights consumer confidence due to a lack of wage growth, product and service price inflation and growing import costs as the biggest factors behind this trend.
The one positive in its report was that higher employment had helped to reduce the impact of insolvencies, but recent studies suggest that businesses are now limiting recruitment and investment in staff due to Brexit.
Further analysis of the data shows that the UK has seen the use of a greater diversity of insolvency procedures, with only receivership appointments experiencing a sharp decline in use.
The greatest rise though has been in the use of Company Voluntary Arrangements (CVAs), which have helped businesses to restructure and avoid administration. These forms of insolvency have been particularly popular among retailers struggling with the pressure of the high street and online shopping.