Many North East firms are “at a crossroads” as they wait to see how the wider economy performs in the coming months, a regional insolvency expert has said.
Kelly Jordan, North East chair of the insolvency body R3, was speaking after new figures showed corporate and personal insolvencies across England and Wales rose slightly in July. R3 said the figures reflected a cautious month for businesses and households as they navigated uncertain economic conditions.
Data from the Insolvency Service showed that corporate insolvencies increased by 1.4% to 2,081 cases compared to June’s total of 2,053, and by just 0.1% against July 2024’s figure of 2,078.
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Ms Jordan, who is a partner at Muckle LLP, said: “Corporate insolvencies across England and Wales remained broadly stable last month, with the trends showing a rise in Compulsory Liquidations and a slight uptick in Administrations, while Creditors’ Voluntary Liquidations and Company Voluntary Arrangements fell.
“This pattern may suggest that fewer directors are choosing to close their companies voluntarily, whether because they are seeing improvements in trading conditions or are caught in a holding pattern, waiting to see where the economy may head next. Compulsory Liquidations were higher this July than compared to one and two years ago, as HMRC continues to take a more assertive stance towards enforcement, with greater appetite to recover unpaid taxes through the courts.
“The broader economic picture shows tentative signs of recovery. Following a weak April and May, when some spending may have been brought forward in anticipation of higher prices, economic activity picked up in June, helping Q2 GDP to grow by 0.3%. While this represents only modest growth, it is encouraging to see the economy moving forward rather than stalling.
“At the same time, a sense of caution remains widespread across the 海角视频. Many firms are sitting at a crossroads, delaying major decisions until they see which way the economy moves. Directors are taking stock of their position and are assessing whether trading conditions are likely to improve and, in many cases, whether the cost-saving measures they may have already taken will be enough to keep their struggling business afloat.”
There have been some early positive signs on the state of the regional and national economy in recent weeks, with a number of surveys suggesting growing business confidence in the North East. Yesterday, new figures showed business activity across the 海角视频’s private sector hit a one-year high, as the services industry led a summer rebound. The S&P Global flash 海角视频 composite purchasing managers’ index (PMI) showed a reading of 53.0 in August, up from 51.5 in July.
Separately, Government borrowing in the 海角视频 slowed to a lower-than-expected £1.1bn in July, providing some relief for Chancellor Rachel Reeves in the run-up to the autumn budget.