PwC comments on July 2024’s insolvency statistics

David Baxendale, Restructuring Partner at PwC UK said:

“Recent data indicates a decrease in insolvencies with a 7% drop from last month. However, the figure was a noticeable 16% higher than in July 2023, confirming the overall trend of elevated insolvency levels persists - and we predict¹ this trend is unlikely to have peaked. 

“Our analysis indicates that most insolvency cases (96.5%) relate to companies with an annual turnover of less than £1 million. However, when focusing only on administrations, this decreases to 70% - indicating that larger companies are now also experiencing financial stress. This is likely to be coming to the fore as the cumulative effects of decreased demand, higher borrowing costs and higher input costs start to filter through, making refinancing even more difficult.

“Retailers have been commenting that this is a key summer. Following a sluggish beginning, marked by inconsistent weather and competing consumer spending priorities, many businesses are hoping for increased activity now that schools are on break. A-Level results in August will also provide essential clarity for the higher education sector. Our analysis² indicates that the sector is under growing strain due to decreasing application numbers, the erosion of tuition fee cap values in real terms, a backlog of capital expenditures, and heightened investment demands.”

Notes to editors

1. PwC’s UK Economic Outlook, July 2024, pages 12-13
2. PwC analysis commissioned by Universities UK - Financial Sustainability of the UK Higher Education sector