Insolvency levels stable as the nation awaits the Autumn Budget

Nick O’Reilly, Restructuring Director at MHA, comments on the latest figures for company insolvencies in England and Wales.

The number of company insolvencies in the England and Wales has risen to 2,029 in October, only 2% higher than September’s figure, as the trend of relative stability in solvency levels persists.

The business climate continues to be marked by uncertainty, with firms closely watching the upcoming Autumn Budget and awaiting crucial decisions from the Chancellor. In the past month, we have seen the insolvency of two regional airlines — Eastern Airways and Blue Islands. While this may merely be a sign of the decline of regional airlines as their passenger numbers fall, it also serves as a reminder that smaller operations are less resilient in the face of an uncertain economic environment.

The Government’s alleged cancellation of planned rises to the base rate of income tax, despite more optimistic economic forecasts, has done little to settle nerves. There remains concern that efforts to address the fiscal deficit could see additional costs shifted to employers, once again hitting businesses following last year’s increases to employer National Insurance Contributions.

While the impact of measures announced in the Budget will likely not be evident in solvency levels until January at the earliest, businesses that can navigate the challenging economic landscape over the next year will be best placed for long-term success. As organisations allocate resources towards productivity-boosting technology, those businesses who weather the current storm should be able to capitalise when these advancements translate into measurable improvements in business efficiency.