As the UK economy continues to cool in the face of higher interest rates and sticky inflation, much of the UK has seen a double-digit increase in insolvency-related activity month-on-month, however, businesses in Yorkshire and the Humber remained stalwart with a rise of just 6% in August 2023.
The latest research from insolvency and restructuring trade body R3, which is based on an analysis of data provided by CreditSafe, shows that while insolvency-related activity again rose in Yorkshire and the Humber last month, the region saw less of an uplift since July than many other regions and nations with just 267 businesses affected here. In August, there was an increase of more than 10% in insolvency-related activity (which includes liquidator and administrator appointments and creditors’ meetings) in the North East (+21.8%), the South East (+17.9%), Scotland (+16.7%), East Anglia (+14.9%) and Northern Ireland (12.5%).
In contrast, Yorkshire and the Humber, along with the South West, the North West, and the West Midlands saw a rise of around 6% since the previous month. The regions performing most strongly last month were the East Midlands (-19.6%), Wales (-11.8%) and London (-0.9%).
However, another indicator of economic wellbeing, the number of new businesses launching, showed a less rosy picture in Yorkshire and the Humber with a slight fall since July, from 4,452 to 4,367 (-1.9%) – the only region in the UK to see a drop in start-ups month-on-month. Of the 12 regions and nations surveyed, those with the greatest month-on-month rise in new businesses were Northern Ireland (+15.8%) and Scotland (+13.5%), while the other nine all saw single figure increases.
Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds, said: “There’s no doubt that businesses across the UK are feeling the impact of falling consumer spending and confidence as the economy continues to suffer the effects of higher energy and fuel costs, along with rising salaries. However, it is somewhat reassuring to see that businesses in Yorkshire and the Humber are among those proving most resilient with levels of insolvency-related activity lower here than in many other regions and nations.
“As we approach the winter, pressures are likely to continue with high interest rates continuing to push up debt repayments and stifle demand, increasing the likelihood of the UK entering recession. Directors must remain alert to the riskier economic environment in which they are operating and turn to insolvency professionals for expert advice as soon as any financial problems emerge.”