The latest insolvency statistics for England and Wales show the number of companies entering an insolvency procedure between July and September rose 1.1% since the same time last year.
The government’s Insolvency Service revealed there were an estimated 3,633 companies entering insolvency during the third quarter – a 2.2% increase since the previous quarter.
The number of companies entering creditors voluntary liquidation (CVL) in Q3 rose by 2.2% since the same time last year and increased 5.2% since the previous quarter.
Those entering compulsory liquidation also increased 2.4% compared to the previous year, however fell 4.5% since Q2 2016.
Looking at administrations, there were an estimated 352 companies entering this procedure between July and September, showing just a slight increase since the same period in 2015.
There were 75 companies entering a company voluntary arrangement (CVA) in the third quarter, down 31.8% compared to the same time last year. The number has fallen 30.6% since the last quarter.
Despite the small overall increase in company insolvencies, 2016 has so far seen a fairly level trend in case numbers, however between 2011 and 2015, the number of companies entering insolvency were in gradual decline.
This slight change in direction could be the result of economic uncertainty post-Brexit and the weakening of the pound, however recent reports actually show economic growth of 0.5% in the last three months – higher than expected. There has also been a global fall in oil and gas prices over the last year which has continued to affect construction and engineering industries across the UK.
Andrew Tate, President of R3, said in a statement:
“A quarterly rise in corporate insolvency numbers is not necessarily an indicator of ‘Brexit’-related financial problems for UK companies. At least, not yet. While companies dependent on imports are struggling with the falling value of the pound, anecdotal evidence from our members suggests the vote to leave the EU has not led to more insolvency procedures due to factors other than the exchange rate. However, we are hearing that more companies have been coming to restructuring experts for advice.”