Bishop & Sewell

When we last commented on the scale of corporate insolvencies in April, inflation was over 10%. As we write today, it’s come down to 3.9% and clearly whilst it’s too soon to claim the Bank of England will be justified in reducing interest rates, there will be many business owners who are holding their breath that it will be any time soon, writes David Little, a partner in our Corporate and Commercial Law team and Stephen Wade, a Partner specialising in insolvency and debt recovery in our Dispute Resolution Department.

Insolvencies surged in November, confirming 2023 is set to have been the worst year for corporate collapses since 2009, according to the UK Insolvency Service. The number of insolvencies in November was 2,466, a 21 per cent increase from the same month in the previous year.

The increase in insolvencies – a number that is also higher than pre-pandemic levels – was mostly driven by 1,962 creditors’ voluntary liquidations and 359 compulsory liquidations.

Reported by the Guardian, retailers are forecast to struggle in particular, as costs rise and shoppers tighten their belts. Weak customer demand is expected to combine with increased costs for a bleak start to 2024 for retailers, according to forecasts by the Retail Think Thank.

Paul Martin, UK head of retail at KPMG said: “It is going to get worse… at best there is going to be stagnation.” Whilst wage growth is finally outpacing inflation, grim predictions about the wider economy are believed to keep spending down for the opening months.

The Bank of England has repeatedly increased rates to try to control inflation, driving up mortgage repayments for millions, resulting in consumers spending less. Some economists believe the Bank may start cutting the interest rate in the first half of 2024, much earlier than previously forecast, according to the BBC.

 Reported by CityAM, Nicky Fisher, president of R3, the UK’s insolvency and restructuring trade body, added: “The fact that corporate insolvency numbers have reached a 14-year high is partly because of the COVID hangover, which was a result of insolvency numbers being suppressed by Government support measures, but also as a result of a relay of economic issues that have taken their toll on businesses.

“Since the spring of 2020, firms have had to contend with the pandemic, the end of the Government support measures, rising inflation, the cost of living crisis, and supply chain issues – with no time to draw breath or recover in between them.”

It’s difficult to disagree with both these experts. Small and medium sized businesses are particularly vulnerable to high energy bills, increasing interest rates and detrimental inflation, alongside little to no government support. With trading conditions still so punishing, we should all anticipate higher than-usual levels of insolvency for some time to come.

If you have concerns for your own business or personal circumstance it’s always prudent not to leave it too long before seeking professional support.

Stephen Wade, is a Partner specialising in Insolvency and Debt Recovery in our expert Dispute Resolution team. You can contact him on 020 7692 7578 or you can email him on

David Little is a Partner at Bishop & Sewell in our expert Corporate & Commercial team. If you would like to contact him, please quote Ref CB441 on either 020 7631 4141 or email

 The above is accurate as at 03 January 2024. The information above may be subject to change.

The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.

Category: News | Date: 3rd Jan 2024

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