I think you’ll find it’s none of those

As the storm clouds continue to darken over Britain’s economy, forcing companies and families to cut costs, at least one industry is gearing up for a boom in business.

Insolvency and restructuring specialists are preparing for a flurry of activity as supply chain issues, spiralling energy costs and rising inflation trigger a wave of corporate distress and bankruptcies.

Rising interest rates are going to expose some debt mountains, that’ll do it.

4 thoughts on “I think you’ll find it’s none of those”

  1. Those things will affect small companies first. I know a few tiny firms around here whose owners have “retired” because they became trapped in a vicious spiral of screwed supply chains, rising wholesale prices and losing customers because they couldn’t keep their prices down. The contagion spreads upwards.

    And it happens very quickly, because their margins are often so tight.

  2. It’s all of those, to some extent, as well as the rise in nominal interest rates which are still lower than inflation so have been cushioning temporarily unprofitable companies, but the trigger for the recent (it has already started) rise in insolvencies has been the end of the government support scheme. Many companies that suffered heavy losses during lockdown have realised that they cannot ever make enough to pay back their accumulated debts and “thrown in the towel”..

  3. I worked for a couple of companies that were debt ridden, but carried on going due to the low interest rates. I can see that they are ones that are going to go to the wall and then someone else who does what they did, in a better manner will pick up the slack. I suspect that there will be lots of those going over the next 24 months. Quite frankly it serves them right and they were buggers to work for. All EU labour on zero hour contracts, no investment in new machines; I mean why bother when we can throw another half dozen Poles at it and then not pay them if we have to send them home early.

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