9 % Rise in Inflation? Dwarfed by the 37% Rise in Insolvencies

Posted on May 18, 2022. by NTI

The sun has been up since 0512 in Tower Hamlets, the sleepy East London home of the NTI newsroom, and the night shift is clearing coffee cups and cardboard cartons from desks to prepare the way for their daytime counterparts, but they have one more story to write before heading off home to bed. Today (Wednesday 18 May) is all about numbers.

At first glance the biggest of these is the whopping 9 per cent that the annual rate of inflation reached in April, with the Bank of England cheerily predicting future "apocalyptic" rises in food costs as they tussle with the fact that they can do nothing about the one thing they are employed to do everything about.

However, for those in our glorious profession this is not the stand out number of the morning. Allianz Trade, a credit insurer, has announced that business insolvencies will rise by 37 per cent this year, being led by a “massive bounce back” in corporate failures in the UK at the end of last year and the start of 2022, particularly in sectors such as utilities, construction and business services.

Official monthly figures for England and Wales published yesterday showed that the number of company insolvencies last month was more than double the number registered a year earlier, and 39 per cent higher than in April 2019. But we hardly need to tell you that. You've been up since yesterday trying to make your non-IPS coded and out-of-touch document packs work to keep up with the flow of business.

If only there was a smart, effective, fully-coded, ready-to-go alternative ...

With so many Britain bashers swirling around the news, it is good to know we are still the best in Europe at something. Allianz Trade predicted that the UK would “outpace its European peers for business failures” as it expected insolvencies to remain artificially low in Germany, France and Italy owing to state support. It forecast that European countries would show sharper increases in insolvencies than the UK next year as they withdraw that support.

This is all due to the macro challenges facing UK business (we will list them here for your convenience). Rising inflation, a contracting economy, historic low consumer confidence, supply chain contraction, delivery and transportation prices, rising fuel and energy costs, demands for increased wages and that new classic, 'the cost of living crisis'.

All this on the day when the headlines should have all been about KPMG's latest fine of £14.4 million, imposed by the ICAEW, three months after the same body took in a now paltry £13.5 million from the same auditor. 

As we said; it's a day of numbers. Off to bed ...

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