Higher interest rates are pushing an increasing number of companies into insolvency, according to one of the UK’s biggest insolvency practitioners.
Begbies Traynor said it expected to see more businesses tip into insolvency “in tandem with the indicators of corporate financial stress in the UK”, alongside its financial results published on Monday.
The Bank of England has raised interest rates from 0.1% at the end of 2021 to 5.25% to try to tame inflation. That has significantly increased the cost of borrowing for UK businesses, preventing many from papering over the cracks with cheap debt. Interest rate increases also have the effect of reducing spending in the economy, giving indebted companies little way out.
Ric Traynor, the…
