PwC commentary on July 2025 insolvency data

The headwinds facing UK businesses appear to be intensifying, as shown by the July insolvency data released today by the Insolvency Service. The figures show there were 2,081 corporate insolvencies in July, up slightly from 2,053 in June and 2,078 for the same period last year, indicating that financial pressures across the market remain persistent.

Smaller businesses remain particularly vulnerable, with over 97% of insolvencies involving companies with annual turnover below £1 million, many of which are owner-managed. PwC analysis shows that construction and retail continue to be the hardest hit sectors. There has also been a noticeable increase in failures across IT and general business services as customers reduce discretionary spending and become more adept at utilising AI. 

Regionally, London, the South East and Midlands have seen a year-on-year increase in failure rates whilst the North West and North East have seen a brief respite in insolvency rates. 

Insolvency rates for the first half of 2025 are tracking closely to last year, suggesting the UK could see more than 24,000 business failures by year-end if current trends persist. Notably, there has been a 10% increase in winding up petitions since May, which could be interpreted as a sign that creditors are increasingly willing to resort to more extreme measures to recover their debts. 

David Kelly, Head of Insolvency at PwC commented:

“The July increase in insolvencies, following a dip in June, show that the finances of many small and owner managed businesses continue to be fragile. Cash flow remains a critical challenge, especially for companies that have seen significant increases in their cost base but have struggled to pass these costs on to customers. These smaller firms, often the lifeblood of the UK economy, are feeling the full force of the current economic pressures.”