The bankruptcies of companies in England and Wales soared in the second quarter of this year to levels recorded in 2009, in the midst of the previous financial crisis, according to data released this Friday by the British Office for National Statistics (ONS, in English).
Between April and June of this year, 5,629 companies were declared insolvent in the United Kingdom, the highest figure in thirteen years and above the average of 3,850 companies per quarter registered between 2015 and 2019, before the coronavirus pandemic.
The persistent increase in energy prices is the main factor highlighted by the ONS to explain the bankruptciesalthough it also underlines the incidence of the increase in the costs of raw materials and interruptions in supply chains.
The rise in bankruptcies in England and Wales comes after a period in which bankruptcies remained below average due to the British government’s financial support package during the pandemic.
More than one in ten companies (11%) claimed to perceive a moderate to severe risk of going bankrupt, according to a survey carried out by the ONS during the month of August.
Companies with less than 50 employees are the ones that perceive the most difficulties, while the construction, manufacturing and hospitality sectors are among the hardest hit by the latest wave of insolvencies.
The price of gas increased by 70% in the first quarter of this year compared to the last three months of 2021, an increase that has had a “significant impact on energy spending by businesses”, underlines the National Statistics Office .
The British Government has announced an aid program for companies to deal with energy costs this winter, through which companies can apply for discounts of up to 405 pounds per megawatt hour (460 euros).
