PwC comments on January's insolvency statistics

Zelf Hussain, Restructuring Partner at PwC UK, said:

“January's insolvency figures have remained steady, with 1,769 insolvencies recorded, a small drop on December’s 2,002 insolvencies - a trend that was widely anticipated given the typical post-holiday business landscape. However, the next few weeks could still prove to be challenging due to the slower post-Christmas trading period.

“Notably, the prevalence of businesses considering Company Voluntary Arrangements (CVAs) has increased year-on-year, indicating a proactive approach by some firms to address their financial challenges through cost reductions and restructuring rather than outright insolvency. Nevertheless, we have found that there are less gains to be derived from CVAs than a few years ago. Many businesses have already renegotiated their leases to market levels  - meaning that despite seeking to restructure and offload costs, some firms will still be forced into insolvency.

“With the latest GDP figures showing that the UK was in a technical recession at the end of last year, the retail, hospitality and construction sectors continue to bear the brunt of insolvencies. These industries, traditionally sensitive to shifts in consumer behaviour and economic conditions, remain under significant pressure due to ongoing challenges, including changing consumer priorities and supply chain disruptions - issues which may not be resolved in the first half of this year.”