Insolvency practitioners are gearing up for a rise in the number of distressed UK companies in 2022 as businesses battle increasing costs, a supply chain squeeze, staff shortages and the threat of further coronavirus restrictions.
The signs that companies were increasingly struggling as pandemic financial support measures tapered off were evident in November, when insolvencies in England and Wales hit their highest level since January 2019, according to government data.
“The number of macro headwinds that are facing all sectors, but some in particular, are just extraordinary,” said Adam Gallagher, a restructuring partner at law firm Simpson Thacher & Bartlett. “They all point to inflation, be it energy, logistics, raw materials, freight, wages — the list goes on.”