The UK's latest quarterly company insolvency statistics, published on 2 August, confirm the trends the restructuring community are seeing so far this year and are expecting to continue as we progress through the year. The marked increase in liquidations confirms that with the withdrawal of most government covid related support, businesses that could not weather the storm long term are failing. It is noticeable that many of these businesses are simply not viable despite the wider toolbox of restructuring tools now available.

The Q2 2022 data marks the first quarterly period after the final of the temporary insolvency measures introduced under the Corporate Insolvency and Governance Act (CIGA) expired. The figures represent a noticeable bump from Q1 2022, with the overall number of registered company insolvencies in Q2 2022 13 per cent higher than the previous quarter and 81 per cent higher than in Q2 2021 (when the majority of the relief measures were still in force).

Creditors’ voluntary liquidations (CVLs) make up the vast majority of corporate insolvencies (87 per cent in the latest quarter). The number of CVLs increased by 13 per cent from Q1 2022 (a possibly better measure than the 74 per cent higher during the same quarter in 2021 when the CIGA measures were still in force. These reflect the highest quarterly level since the start of the series in 1960.

Compulsory liquidations also increased. These were 9 per cent higher than in the previous quarter and nearly four times as high than in Q2 2021. Overall however, compulsory liquidations remained lower than levels seen before the coronavirus pandemic. In terms of sectors it is no surprise that the most impacted are retail (13 per cent of cases) and food (12 per cent of cases) given the pressures of the cost-of-living squeeze. The increased distress in construction (19 per cent of cases) is perhaps more worrying, demonstrating that pricing and demand issues are now deep seated in the economy. All industries saw increased insolvency numbers in the 12 months ending Q2 2022 compared to the period ending Q2 2021. It is hard to imagine the next two quarters bringing any improvement to these numbers with most practitioners expecting more distress as we head towards further energy price rises in the autumn and the ongoing impacts of a high inflationary environment, both of which are likely to exacerbate both direct and indirect pressures on business due to rising supply costs and further tightening of consumer spending.

It is hard to imagine the next two quarters bringing any improvement to these numbers with most practitioners expecting more distress