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Corporate Insolvencies Up Q4 2017

Increasing interest rates are likely to push up both corporate and personal insolvencies in the coming years.  The last published insolvencies are up for corporate insolvencies.

In relation to the 4th Quarter 2017 Insolvencies, Duncan Swift, deputy vice-president of insolvency and restructuring trade body R3, commented:

  • Excluding one-off ‘bulk insolvency events’, corporate insolvencies in 2017 rose 2.5% from 2016. Excluding these one-off events, there were 15,112 insolvencies in 2017.
  • Excluding a one-off ‘bulk insolvency event’, corporate insolvencies fell by 17.2% in Q4 compared to Q3 2017 and by 10.9% compared to Q4 2016.

“The slight rise in corporate insolvencies across 2017 as a whole is a reflection of the difficult year that firms in England and Wales have been through. Once exceptional events have been stripped out, there has been a small upwards trend in insolvencies since 2016, reversing several years of falling insolvency numbers.

“Inflation has eaten into many firms’ margins thanks to rising input costs on the one hand, and with customers proving somewhat reluctant to stomach higher prices on the other. Businesses have faced additional headwinds in 2017 with business rates changes, an increase in the National Living Wage, and the final stages of the pensions auto-enrolment roll-out. Slower GDP growth has hindered firms’ momentum, too.

“Our members have reported the construction and retail sectors as being under the most strain. The construction stresses most obviously demonstrated by Carillion in the early part of 2018."

Full comments from Duncan Smith: https://www.r3.org.uk/index.cfm?page=1114&element=31331&refpage=1008