Experts from Begbies Traynor have warned that more than 55,000 businesses are in “serious financial distress” as the “economy is in real trouble.”
The quarterly Red Flag Alert report from the insolvency specialist is strongly advising the Chancellor that her Autumn Budget “must deliver urgent support to avoid a wave of failures.”
The insolvency specialist has revealed there has been a whopping 78% rise in the number of businesses in “critical” financial distress, the number now stands at 55,530 in the third quarter of this year.
The Red Flag Alert report shows there has been a 12.6% increase in the quarter to June, this shows that more than 6,000 companies are in a far worse position than in 2024.
Some 96.7% leisure and cultural companies who are in a “critical” condition and there has been a 92.5% rise in hotel and 85.6% increase for retailers.
Begbies Traynor said the number of companies in financial difficulty has increased 14.8% year-on-year to 726,594 in the same period.
There are fears that Rachel Reeves will raise taxes in the upcoming 26 November Autumn Budget to fill the multi-billion black hole.
Julie Palmer, partner at Begbies Traynor, said the concerns for thousands of businesses “shows the UK economy is in real trouble.”
She added, “With over 55,000 companies now in serious financial distress, the upcoming Budget must deliver urgent support to avoid a wave of failures, especially among SMEs already operating on a knife edge.
“Unfortunately for UK businesses, inflation is going nowhere, putting further pressure on companies at a time when wage, tax, and financing costs are already high.
“Many firms have no room to manoeuvre, and instead of investing for growth, are scaling back just to survive – the opposite of what the economy needs, if it’s going to recover and grow.”
