Record distress levels across sectors
The number of UK businesses experiencing significant financial distress reached 738,144 in the third quarter of the year, marking a 1.6% increase compared with the same period last year. According to data from administrator BTG, this is the highest level recorded since its red flag report began in 2004. Support services, construction and real estate sectors faced some of the highest vulnerabilities, while hospitality took a severe hit with a 5% rise in distressed bars and restaurants to reach 18,866. Struggling food and drug retailers also climbed by over 7% to 19,269. BTG chief executive Mark Fry noted that firms are battling rising employment costs, inflation, high energy prices, and elevated borrowing expenses. Additionally, a freedom of information request revealed that businesses still owed £27.3bn in tax arrears to HMRC at the end of August.