One of Britain’s leading insolvency specialists plans to expand its workforce to deal with the expected surge in failing companies.
Ric Traynor, executive chairman of Begbies Traynor, said he expected the restructuring firm would add up to 100 staff by the end of April, a rise of about 10 per cent, as businesses in the UK faced a ‘perfect storm’ of pressures.
The number of business failures is already back up to pre-pandemic levels as taxpayer assistance is cut, but a further increase is ‘likely’, he said, adding of insolvencies: ‘We’re going to see yet more to come.’
Going under: The number of business failures is already back up to pre-pandemic levels as taxpayer assistance is cut, but a further increase is ‘likely’
Small firms are worst hit, but he expected the malaise to spread to bigger firms this year and next, leading to higher profile failures.
He said the cocktail of pressures included the withdrawal of ‘massively generous’ support measures introduced during successive lockdowns, coupled with ‘massive inflation’ and supply chain disruption.
Rising interest rates are also pushing up the cost of servicing debt while the reopening of courts after the pandemic made it easier for lenders to chase overdue loan repayments, he said.
Analysis by the group suggests half a million businesses in the UK are ‘under stress’ and 10 per cent of those were expected to go insolvent within the next two years.
Traynor said the trend of rising insolvencies was likely to subside towards the end of 2023.
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