THE BUSINESS fall out caused by coronavirus is becoming more apparent according to the trade body for insolvency professionals.
The Southern and Thames Valley branch of R3 made the warning following the release of the latest corporate and personal insolvency statistics.
They reveal that corporate insolvencies in England and Wales are up 29% from June to July – but also 34% down year-on-year.
Gary Lee, regional R3 chair and associate director of the recovery and restructuring services department at Smith and Williamson’s Southampton office, said that signs are pointing to a ‘tough road’ ahead.
“The UK has entered a recession, consumer confidence is low, and a number of big-name brands have recently announced they are exploring or have entered insolvency or restructuring procedures,” he said.
“This suggests the business climate will be challenging in the foreseeable future – and will not be made any easier as the Government support packages begin to wind down.”
And he warned that while numbers are down year-on-year now, R3 was concerned that it will be a while before the effects of the pandemic will be felt.
“Although the statistics suggest the pandemic is starting to affect corporate insolvency levels, the Government’s continued support for businesses and consumers means we’re not much nearer to understanding how Covid-19 is truly affecting underlying corporate or individual distress than we were last month,” he said.